Why Brooks Automation's Shares Plunged

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 technology equipment maker Brooks Automation (Nasdaq: BRKS  ) saw its shares dive 14% today after the company released earnings.

So what: Revenue fell 25% in the fiscal third quarter to $140.4 million and net income dropped from $66.9 million a year ago to $8.0 million, or $0.12 per share. Revenue was short of estimates and on an adjusted basis earnings per share of $0.14 were $0.05 below expectations.

Now what: The business is dealing with a challenging environment, but it still didn't live up to its own low expectations. With sales falling as much as they did, and the company's profitability well short of expectations, I'd wait for some positive momentum before jumping in. The company does have over $200 million in cash and no debt, so the balance sheet is strong, yet I would just like to see better earnings before buying in.

Interested in more info on Brooks Automation? Add it to your watchlist by clicking here.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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Read/Post Comments (2) | Recommend This Article (2)

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  • Report this Comment On August 10, 2012, at 4:19 PM, NewLowObserver wrote:

    Good information.

    One thing to note is that the actual operating EPS for the last year 3Q was $0.34 / share. The $66.9M income had a boost of $45M from the sales of contract business. Still, earning fell by more than 60% when backed out that number.

  • Report this Comment On October 21, 2012, at 8:44 PM, chris293 wrote:

    Fear is a buy signal?????????????? But I think I should sleep on it. You never know!

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