Wabash National Dropped: What You Need to Know

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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: You might think investors would be happy to hear Wabash National (NYSE: WNC  ) announce earnings of $0.05 per share yesterday, instead of the $4.64 per share it lost last year. You might think they'd be especially pleased by the earnings number considering analysts had told them to expect only $0.02 per share in profits. And that they'd be thrilled to learn from CEO Dick Giromini that Wabash just booked its biggest first-quarter gross profit margin since 2007. You might think all that … but you'd be wrong.

Instead of cheering and tickertape, investors met Wabash's news with a wave of catcalls, and a 10% drop in share price.

So what: Maybe investors were just too optimistic, and assumed Wabash would beat bigger than it actually did. After all, aside from a few outliers like YRC Worldwide (Nasdaq: YRCW  ) , we've seen generally strong results from truckers Old Dominion Freight (Nasdaq: ODFL  ) , JB Hunt (Nasdaq: JBHT  ) , and UPS (NYSE: UPS  ) these past few weeks. And Wabash does build trailers for trucking fleets. Success this past quarter may have been a conclusion foregone -- and optimism, overblown.

Now what: Now that reality has set in, what we're left with at Wabash is a company that's barely breaking even on a GAAP basis, and still burning cash like a trucker burns diesel. Until it gets its cashflow fixed, I wouldn't recommend hitching a ride.

Want more information on Wabash National? Add it to your watchlist.

The Fool owns shares of UPS, but Fool contributor Rich Smith does not own shares of, nor is he short, any company named above.  The Motley Fool has a disclosure policy. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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