Why Superior Industries Shares Dropped

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Superior Industries were looking anything but good today, falling as much as 14% on a disappointing earnings report.

So what: The aluminum-wheel manufacturer said it earned just $0.10 a share, on expectations of $0.25, and revenues fell 3.1%, to $210 million. This was due to a drop in average selling price due to lower aluminum prices. Superior also announced plans to build a new manufacturing facility in Mexico "to expand capacity and meet anticipated growth in demand."


Now what:As we've seen with Alcoa's troubles, now is not a good time to be in the aluminum business. The supply glut from China, and the generally slow worldwide economy, has also forced down prices. I'd wait for the commodity weakness to dissipate before getting on board.

Don't miss the next update on Superior Industries.

The article Why Superior Industries Shares Dropped originally appeared on Fool.com.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of Superior Industries. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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