Liquidity Services Shares Plunged, Then Recovered: 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 surplus-goods marketplace operator Liquidity Services (NAS: LQDT) are on a wild ride today, plunging by as much as 16% in the morning only to recover into positive territory currently, after the company reported third-quarter earnings this morning.

So what: The initial sell-off may be attributed to the bottom-line miss, as earnings per share came in at $0.14, which was a nickel per share short of the estimate of $0.19. Meanwhile, the top line showed a better-than-expected $80.7 million.

Now what: Liquidity Services CEO Bill Angrick said that the company "continued to grow our market share and build on our leadership position in the reverse supply chain market during a seasonally low quarter for the Company," and also cited strength with large commercial and government clients. For its fiscal 2012, the company sees earnings per share in the range of $1.26 to $1.32, compared to the consensus of $1.13. While the gut reaction to the profit miss may have triggered some selling, the long-term prospects look just fine.

Interested in more info on Liquidity Services? Add it to your watchlist byclicking here.

At the time this article was published Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio.Motley Fool newsletter serviceshave recommended buying shares of Liquidity Services. Try any of our Foolish newsletter servicesfree for 30 days. 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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