Intermec Shares Plunged: What You Need to Know


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: Intermec (NYS: IN) dropped 23% in intraday trading today after an issuing disappointing earnings and guidance.

So what: Non-GAAP EPS of $0.09 missed the $0.10 consensus estimate but improved markedly from -$0.04 in the year-ago quarter. GAAP EPS of -$0.06 worsened from -$0.04 in the year-ago quarter, despite revenue growth of 37% (16% organic) to $221 million.

Now what: Acquisition-related and restructuring costs were the primary drivers of the worsening GAAP earnings. Management guided the current quarter to non-GAAP EPS of $0.07 to $0.12, well below the $0.15 consensus estimate. At today's intraday price of $7.88, the stock's non-GAAP forward P/E ratio is 16.5 times and its non-GAAP P/E ratio is in the triple digits. That's hard to justify with analysts expecting EPS growth of only 3.3% over the next three to five years.

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At the time thisarticle was published Fool contributor Cindy Johnson does not own shares of any company named above. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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