Carbo Ceramics Shares Got Crushed: 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 ceramic proppants provider Carbo Ceramics (NYS: CRR) fell 20% today after the company reported extremely disappointing earnings.
So what: In the fourth quarter, revenue was just $158.1 million, compared to the $179.2 million analysts expected. Earnings were also terrible, reaching just $1.43 per share versus the $1.70 analysts expected.
Now what: The cutback in natural gas drilling due to low prices is impacting Carbo faster than most expected. Haynesville shale volumes fell 70% in the quarter, and volumes will likely fall further as Chesapeake Energy cuts off up to 1 billion cubic feet per day of supply. Management hopes to make up the losses in liquids drilling, but for now earnings and revenue will suffer.
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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.Motley Fool newsletter services have recommended buying shares of Chesapeake Energy. 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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