Why OMNOVA Solutions' Shares Dropped
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 chemical maker OMNOVA Solutions (NYS: OMN) fell 13% today after reporting earnings.
So what: Net sales fell 8.5% to $26.8 million as both prices and volumes fell. On the bottom line, profitability improved and the company reported adjusted income from continuing operations of $7.1 million, or $0.16 per share, up from $4.5 million a year ago. Analysts expected earnings of $0.20 per share.
Now what: The disappointing earnings numbers are pushing the stock lower and future results don't look promising. Management said that volumes won't pick up in the fiscal fourth quarter, and raw materials costs are expected to go up. With revenue headed in the wrong direction and the bottom line disappointing analysts, I don't think the dip is worth buying today.
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The article Why OMNOVA Solutions' Shares Dropped originally appeared on Fool.com.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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