Why Exterran Holdings' Shares Dropped Today

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 Exterran Holdings fell as much as 12% today after reporting earnings.

So what: Second-quarter revenue rose 33% to $837.3 million and earnings were $0.31 per share for the quarter. That beat estimates of $813.9 million in revenue and $0.09 per share in earnings. The problem is that management pointed to a reduction in backlog as a reason fourth-quarter revenue will be below the second quarter, which investors are focusing on.

Now what: This often happens during earnings season where the market focuses on guidance instead of killer quarterly numbers. I don't think this is reason to be terribly concerned, but at 34 times next year's estimates the stock still isn't a great value. I'd wait to see how the rest of the year plays out before jumping in because I don't see the stock getting away from investors any time soon.

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The article Why Exterran Holdings' Shares Dropped Today originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. 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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