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 Kirby
So what: Kirby shares have been walloped recently on worries about soft demand, and today's big second-quarter guidance cut -- management sees EPS of $0.80-$0.85 versus its prior view of $0.97-$1.02 -- confirms those fears. Decade-low natural gas prices continue to hurt orders at the company's hydraulic fracturing unit, United Holdings, giving investors very little hope for a near-term turnaround.
Now what: Looking further ahead, management now expects full-year 2012 EPS of $3.45-$3.70, down from its earlier forecast of $3.85-$4.12. "While numerous negative issues have resulted in the lowering of our 2012 second quarter earnings guidance, for the 2012 year the primary difference between our low end guidance of $3.45 per share and high end guidance of $3.70 per share is the level of United's oil field related business in the second half of the year," Chairman and CEO Joe Pyne said. More important, with the stock hitting a new 52-week low today and trading at a forward P/E of roughly 11, most of that weakness might already be baked into the price.
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