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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: Shares of shoplifting prevention system manufacturer Checkpoint Systems (NYSE: CKP ) appear to have been caught red-handed, with the stock down as much as 10% following disappointing earnings results.
So what: In the fourth quarter, Checkpoint reported a loss of $0.33 on an 8.5% rise in net sales. This loss widely missed Wall Street's consensus EPS loss of just $0.06. An ongoing restructuring is the primary reason results were weaker than expected. Checkpoint also guided its fiscal 2012 sales and earnings forecast well below the Street. It expects EPS in the range of $0.55-$0.76 and sales of $845 million-$875 million. Consensus estimates had called for EPS of $0.96 and $928.5 million in sales.
Now what: Restructuring is undertaken to save a company money in the long run, but it can often make the short term ugly for investors. I feel confident that Checkpoint is making the right moves, but I'm not certain we've seen the end of worse-than-expected earnings results. For now, I am more than happy being a spectator on the sidelines and waiting for these cost-saving measures to translate into tangible results.
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