Why Republic Services Shares Plunged

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 trash hauler Republic Services (NYS: RSG) sank 11% on Friday after its quarterly results and outlook disappointed Wall Street.

So what: The stock has rallied in recent months on hopes for solid profit growth, but today's big miss -- EPS fell to $0.38 versus the consensus of $0.42 -- is forcing Mr. Market to sober up a bit. Weak volume and higher costs continued put pressure on gross margins, giving investors plenty of tailwinds to be concerned about.

Now what: Management now sees full-year EPS of $1.86-$1.90, down from its prior view of $1.98-$2.02. "We are updating our full year guidance to reflect higher costs and current business conditions," said CEO Donald Slager. Of course, for long-term investors looking for a solid way to make some income, today's pullback in Republic Services shares -- its dividend now yields a juicy 3.2% -- might be worth pouncing on.

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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Republic Services. 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 Fool's disclosure policy always gets a perfect score.

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