Why Air Transport Services 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 aircraft industry supplier Air Transport Services fell 11% today after the company reported earnings.

So what: Revenue fell 9.5% in the second quarter to $138.9 million. Worse yet, net income from continuing operations fell 38% to $6.9 million, or $0.11 per share. That fell short of the $0.15 per share analysts expected and caused the big sell-off today.

Now what: Revenue and expense trends both worked against the company this quarter, although management said the trajectory slowed in July. I still don't think this is a buy sign despite the fact that shares are trading at nine times trailing earnings. Until revenue turns around and profits improve I'll be staying away from this stock.

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The article Why Air Transport Services Shares Dropped 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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