R.R. Donnelley & Sons 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 integrated communications company R.R. Donnelley & Sons (NAS: RRD) fell 15% today after the company gave full-year 2011 guidance.

So what: Management expects to report 2011 revenue of $10.6 billion and full-year free cash flow in the range of $650 million to $700 million. Revenue fell short of analyst estimates of $10.7 billion, and the company doesn't yet know the impact of a pension curtailment gain and other items, so it wasn't able to forecast earnings.

Now what: The company will report earnings on Feb. 22, at which time we'll find out more about why revenue was so short of estimates. In statements today, management focused on strong cash flow numbers, which investors are obviously overlooking for now. Until we hear more during the earnings call, I am steering clear of this stock because I don't want to get in ahead of even more disappointment.

Interested in more info on R.R. Donnelley? Add it to your watchlist byclicking here.

At the time this article 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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