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 hospital bed supplier Hill-Rom Holdings (NYS: HRC) sank 15% today after its quarterly results and full-year guidance disappointed investors.
So what: Hit by a charge related to a potential legal settlement, Hill-Rom's third-quarter earnings plummeted 95% to $1.5 million, or $0.02 per share. Hill-Rom shares have done particularly well in 2011, fueled by growth in its North American acute-care segment, so today's profit plunge comes as an extra-big disappointment to Wall Street.
Now what: Expect the share price turbulence to continue. Due in large part to weak international sales, management also lowered its full-year earnings and revenue outlook a touch, giving investors little reason to be upbeat in the short term. Of course, with Hill-Rom now sporting a forward P/E of 14 after this sell-off, Mr. Market might be providing an inexpensive long-term opportunity.
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At the time thisarticle was published Fool contributorBrian Pacamparaowns no position in any of the companies 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 Fool'sdisclosure policyalways gets a perfect score.
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