Why MYR Group's 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 electrical contractor MYR Group dropped 10% today after the company released earnings.
So what: Contract revenues dropped 16% in the first quarter, to $201.3 million, and net income rose 12%, to $7.0 million, or $0.32 per share. The problem for MYR Group is that Wall Street was expecting $245.5 million in revenue, and $0.35 per share in earnings, and the company well short of that.
Now what: The downside is that revenue was disappointing, but we shouldn't forget that gross margin was up to 13.6%, from 10.9% a year ago. That's encouraging because contract wins and, therefore, revenue can be choppy, so cost controls are important. I'm not overly excited about the results, but the 10.4 forward P/E ratio is fairly attractive, and if shares slip further over the next few weeks, I think investors can get an attractive value.
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The article Why MYR Group's Shares Plunged 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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