Don't let it get away!
Keep track of the stocks that matter to you.
Help yourself with the Fool's FREE and easy new watchlist service 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: Lubrizol (NYSE: LZ ) dropped 11% in intraday trading after today's disappointing earnings release.
So what: Although third-quarter profit for this specialty-chemical company (think driveline lubricants and metalworking fluids) came in 9% higher than the same period last year, that increase was mostly from a one-time tax benefit. With that tax benefit backed out, the company missed analyst earnings estimates, and gross margins fell more than 3 percentage points year over year.
Now what: Although the picture doesn't look quite as rosy as Lubrizol's press release would have us believe, there are a number of positive signs. Volume rose 1% during the quarter, and the company provided raised guidance for the full fiscal year -- $10.35 to $10.55 a share, up from $9.60 to $10 a share. They also expect strong growth over the next few years, predicting earnings of $13.50 a share in 2013. Given that this showed up on my colleague Rex Moore's screen for the Top 10 Values in Chemicals, this dip may provide a great entry point for a stock that's risen nearly 50% in the last year.
Interested in more info on Lubrizol? Add it to your watchlist by clicking here.