Dresser-Rand Group 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 industrial equipment maker Dresser-Rand (NYS: DRC) fell 10% today after the company updated its outlook.

So what: The company expects fourth-quarter revenue to be approximately $350 million, $200 million lower than previous expectations. For the full year 2011, the company expects operating income to be between $253 million and $258 million.

Now what: The major shortfall in the fourth quarter was blamed on customer buyouts and deferrals. The shipments will still take place, but have been moved back to 2012. Bookings have also been delayed so the company is certainly feeling some near-term pressure. I'm not buying the dip today and would like to see if more orders are delayed or canceled before jumping in.

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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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