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 Mistras Group were falling flat today, dropping as much as 12% after reporting a disappointing quarter.
So what: Mistras, which provides energy infrastructure services, said revenue increased 28% in the quarter to $133.9 million, while earnings came in at $0.09 per share, down from $0.13. Sales were enough to beat estimates, but earnings were well short of the experts' view at $0.17. Much of Mistras' revenue growth also came from acquisitions, as organic sales increased 10%. CEO Sotirios Vahaviolos pointed to improvements in international sales but also said that changes in the sales mix led to lower profits. Management now expects fiscal-year revenue to come in the high end of its guidance of $525 million to $535 million, in line with analyst estimates, but it lowered its EBITDA guidance.
Now what:It's never a good sign when profits move in the wrong direction, but the top-line beat should help reassure investors. Management also expressed confidence in long-term growth prospects, and if sales increase, profits should eventually follow. I wouldn't change my investing thesis based on today's report alone.
Stay up to date on Mistras Group. Add the company to your Watchlist by clicking right here.
The article Why Mistras Group Shares Tumbled originally appeared on Fool.com.
Fool contributor Jeremy Bowman and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.