Why Gulf Island Fabrication's Shares Dropped
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 drilling platform fabricator Gulf Island Fabrication dropped as much as 10% today after the company released earnings.
So what: Third quarter revenue was up 19% to $168.2 million, and the company swung to a profit of $3.3 million, or $0.23 per share. The profit was up from a $0.72 loss per share last year, but still fell five cents short of estimates, which is why investors are disappointed today.
Now what: One of the things to be worried about is a backlog decline from $537.0 million at the beginning of the year to $342.5 million at the end of last quarter. Part of the decline was from a project that may be taken over by another contractor, which isn't a good sign. Operations are just too volatile for me to jump into, and I'm seeing better values than Gulf Island Fabrication in the drilling business.
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The article Why Gulf Island Fabrication's Shares Dropped originally appeared on Fool.com.Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.