UTi Worldwide Shares Plunged: What You Need to Know

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 global logistics provider UTi Worldwide (Nasdaq: UTIW  ) were shipped down under today, losing as much as 10% in intraday trading after the company announced its fiscal third-quarter earnings.

So what: UTi registered $0.26 in per-share earnings during the quarter, which was a penny better than analysts were expecting, but that wasn't enough to offset investor disappointment in other areas of the report. Total sales came in at $1.2 billion, which was short of the $1.22 billion that Wall Street was hoping for. In addition, CEO Eric Kirchner said that though pressure on the company's yield -- that is, net revenue as a percentage of total revenue -- appears to be moderating, he didn't see yield improvements offsetting volume weakness in the upcoming quarter.

Now what: The 10% drop in UTi's stock seemed a little excessive to me -- and the market appears to be in agreement as the drop has since moderated significantly. The continued economic recovery should be a tailwind behind transportation and logistics companies like UTi, as well as Expeditors International (Nasdaq: EXPD  ) , YRC Worldwide (Nasdaq: YRCW  ) , and Con-way (NYSE: CNW  ) . However, many of these stocks -- including UTi -- carry relatively high valuation multiples that seem to bake in significant growth ahead. That may make investors particularly jumpy when any of these companies suggest that there may be speed bumps ahead.

Want to keep up to date on UTi Worldwide? Add it to your watchlist.

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.

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy assures you no Wookiees were harmed in the making of this article.


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1387610, ~/Articles/ArticleHandler.aspx, 9/1/2014 8:36:57 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement