Why Titan Machinery 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 Titan Machinery (NAS: TITN) fell as much as 21% today after the company released earnings.

So what: Sales rose 33% at the agriculture and construction retailer to $421.7 million, topping estimates of $393.4 million in revenue from analysts. But the bottom line is where Titan fell short, posting earnings per share of $0.36, $0.02 short of estimates.

Now what: The higher sales were followed by higher cost, primarily blamed on a greater mix of construction revenue. Investors may be disappointed with today's profit, but if we take a step back, management is expecting fiscal 2013 profit of $2.55-$2.75 per share, on par with estimates. This also puts the stock at about a 10 P/E, a great price for a company growing revenue and earnings. I think the stock can recover from today's fall and outperform long-term.

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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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