July 10, 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 chemical maker A. Schulman (Nasdaq: SHLM ) jumped 10% today after the company released earnings.
So what: Third-quarter adjusted earnings per share were $0.69 versus the $0.62 analysts had expected. However, sales fell 7% to $569.1 million during the quarter.
For the full year, the company now expects adjusted earnings per share of $2.03 to $2.07, higher than the current $2.01 estimate.
Now what: Earlier this year, investors were spooked by a $0.01 miss, and this quarter just balances things out. The higher estimate for the year is encouraging, but we should keep in mind that it still doesn't reach the $2.16 in earnings per share analysts had expected three months ago. Today's news is a positive short term, but I'm leery of the fall in sales and I would prefer to buy if the stock falls back to where it was before the pop to get more value out of the investment.
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