Tesco Shares Dropped: 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: Shares of energy supplier Tesco (NAS: TESO) fell 17% today after the company released earnings.

So what: During the third quarter, revenue grew 36% to $127 million, falling $2 million short of estimates. But the bottom line was much worse, and earnings of $0.10 per share fell well short of the $0.23 analysts had expected.

Now what: Management pointed to higher repair and maintenance costs, as well as costs to expand capacity, for the downfall. The earnings miss is concerning, but the growth Tesco is displaying should continue as drilling expands. I'm not jumping into shares because this is the fourth straight earnings miss for Tesco, but if shares continue to drop, they may be entering value range.

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At the time thisarticle was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.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.

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