Mobile TeleSystems Shares Got Crushed: 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: The line went dead for shares of Russian telecom giant Mobile TeleSystems (NYS: MBT) today as the stock fell as much as 12% in intraday trading after the company announced second-quarter results.

So what: For the second quarter, Mobile TeleSystems continued to grow. Unfortunately, what was all too clear to investors was that despite the growth, net profit for the quarter came in lower than Wall Street had expected. What was also clear is that the full-year results aren't going to look as good as the company previously thought as management lowered its OIBDA (a profitability measure) margin forecast from a range of 42% to 43% to an expectation of profitability in "the low 40s."

Now what: The traders have already made their move on Mobile TeleSystems, and that's no surprise. Investors, on the other hand, may want to dig further into the financials before making a rash decision one way or the other. Though the company's earnings press release is pretty devoid of numbers, there's a fantastic spreadsheet with its full financials on its investor relations website. Obviously of particular note for investors as they pick apart the situation is that the company's profitability has been steadily falling over the past few years.

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