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 manufacturing equipment specialist MKS Instruments (Nasdaq: MKSI ) fell as much as 10% in early trading on average volume. The stock has since recovered, down less than 1% as of this writing.
So what: What gives? MKS ruined a perfectly good third-quarter report with a dour Q4 outlook. Let's cover the good news first. Q3 revenue fell 12% to $194.5 million while adjusted earnings dropped 19% to $0.58 a share. Analysts were more pessimistic, expecting just $0.48 a share on $190.6 million in revenue.
Now what: The bad news? Wall Street expected MKS to make up the shortfall and then some in Q4. Instead, management forecast $0.18 to $0.31 in adjusted earnings on $145 to $165 million in revenue -- well off not only last year's totals, but also the $0.43 and $182.7 million analysts were expecting. The intraday rally suggests Big Money investors may be trying to catch this falling knife. Be careful following them, Fool: You might get cut. Do you agree? Would you buy shares of MKS Instruments at current prices? Please weigh in using the comments box below.
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