Why Newpark Resources Shares Got Crushed


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 Newpark Resources (NYS: NR) fell 12% today after releasing first-quarter earnings.

So what: Revenue rose 29% to $262.3 million and earnings were virtually unchanged at $15.6 million, or $0.16 per share. The problem is that analysts had expected revenue of $269 million and earnings of $0.21 per share, hence the drop today.

Now what: Reduced activity in the dry gas business was blamed for the weaker than expected profitability and margin declines in the U.S. Raw materials also affected profitability negatively in the quarter. The results weren't great but Newpark is trading at just eight times trailing earnings and six times forward earnings so I wouldn't dump shares on the dip today. In fact, I view this as a buying opportunity as a low point in the market.

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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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