Matthews International 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: Shares of memorial maker Matthews International (NAS: MATW) got buried with pessimism today, down by as much as 11%, after the company reported earnings yesterday.

So what: Fourth-quarter revenue came in at $239.8 million while earnings per share were $0.71. Although revenue was better than expected, net profit came in right on track with consensus estimates. Investors may be disappointed that next year's earnings are expected to grow in the mid-single-digit range.

Now what: Matthews CEO Joseph Bartolacci said the company had a challenging start to the fourth quarter because of a slower-then-expected July, although Matthews improved performance during the rest of the quarter. Bartolacci expects the company to "certainly continue to face challenges in fiscal 2012," because of the uneven pace of economic recovery. The company's memorialization businesses continue to operate in an environment of relatively flat death rates, competitive pricing pressures, and volatile commodity costs, making it tough to forecast future results with accuracy.

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