Why KEYW Holding's 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 cyber security company The KEYW Holding Corporation dropped 10% today, after releasing earnings.

So what: Revenue jumped 48%, to $74.2 million, and net income declined slightly to $0.2 million, or break even per share. The problem today is that analysts expected revenue of $76.2 million and a profit of $0.01 per share, so both numbers missed estimates.

Now what: When you're close to breaking even, an earnings miss by even the smallest amount can disappoint investors. The company did say that acquisition-related intangibles and other one-time expenses had a negative impact on earnings of $0.11, so the numbers may improve going forward. I'd like to see some bottom-line results before jumping in, especially with the company so close to losing money.

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The article Why KEYW Holding's Shares Dropped originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw. The Motley Fool has no position in any of the stocks mentioned. 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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