Why Primoris Services' Shares Plunged
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 Primoris Services (NAS: PRIM) fell 11% today after the company released first-quarter earnings.
So what: In the quarter, revenue fell 19% to $291.6 million and net income dropped to $10.5 milion, or $0.20 per share, from $12.3 million a year ago. Analysts had expected $339.1 million in revenue and $0.24 per share in earnings.
Now what: A big earnings miss like this will usually have shares tumbling, but I'm willing to look past that to the future. Management said that if you take out the impact of the Ruby pipeline project last year, revenue and profits grew modestly in this seasonally weak quarter. The company also announced $263.5 million in new contracts that should be completed by the end of the year. With a forward P/E ratio of 8.8, this could be a bottom if financial results improve even slightly from here.
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