Why Pacer International's Shares Popped

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 logistics company Pacer International rose as much as 14% today after the company reported earnings.

So what: Third quarter revenue fell 28% from a year ago to $250.0 million, and was below the $258.2 million estimate. But earnings per share came in at $0.08, which was a penny better than estimates.  

Now what: On the surface the revenue decline looks extreme, but it's largely due to a new cross-border agreement with Union Pacific that doesn't require the company to pass rail transportation costs through its income statement. This will lower revenue and costs but shouldn't have a big impact on the bottom line. The adjustment made guessing earnings difficult this quarter, which is why investors are cheering the bottom line beat without worrying too much about the top line miss.

More great stock ideas
Overall, the market has stormed out to huge gains across 2013, leaving investors on the sidelines burned. However, opportunistic investors can still find huge winners. The Motley Fool's chief investment officer has hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2013." To find out which stock it is and read our in-depth report, simply click here. It's free!

The article Why Pacer International's Shares Popped originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool owns shares of Pacer International. 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.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story