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What: Shares of copper tubing manufacturer Mueller Industries (NYS: MLI) got a pipe to the head from investors today, falling as much as 17% in intraday trading after the company reported third-quarter results.
So what: For the quarter, Mueller's net sales were up 16% from last year, to $586 million, topping the average analyst estimate of $571 million. Profitability, however, was hurt by higher costs, including a 20% increase in the cost of sales and a 19% jump in selling, general, and administrative spending. As a result, earnings per share fell 46% from last year. Excluding a pre-tax charge due to the falling price of copper, per-share profit was $0.39, well short of the $0.69 that Wall Street was expecting.
Now what: While lower copper prices had a detrimental effect on Mueller's third-quarter bottom line, if the price for the metal doesn't spike back up, that would be good news for the company. Meanwhile, with Mueller's results leveraged primarily to residential and commercial construction, investors will definitely require patience as those markets continue to try to find firmer footing in the wake of the real estate meltdown.
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