April 27, 2012
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 trash hauler Republic Services (NYSE: RSG ) sank 11% on Friday after its quarterly results and outlook disappointed Wall Street.
So what: The stock has rallied in recent months on hopes for solid profit growth, but today's big miss -- EPS fell to $0.38 versus the consensus of $0.42 -- is forcing Mr. Market to sober up a bit. Weak volume and higher costs continued put pressure on gross margins, giving investors plenty of tailwinds to be concerned about.
Now what: Management now sees full-year EPS of $1.86-$1.90, down from its prior view of $1.98-$2.02. "We are updating our full year guidance to reflect higher costs and current business conditions," said CEO Donald Slager. Of course, for long-term investors looking for a solid way to make some income, today's pullback in Republic Services shares -- its dividend now yields a juicy 3.2% -- might be worth pouncing on.
Interested in more info on Republic Services? Add it to your watchlist.