Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Rock-Tenn Shares Plunged

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

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 paperboard and packaging company Rock-Tenn (NYSE: RKT  ) sank 10% today, after its quarterly results disappointed Wall Street.

So what: Rock-Tenn's fourth-quarter adjusted EPS managed to squeak past estimates, but a miss on the top line -- $2.35 billion versus the consensus of $2.43 billion -- is triggering concerns over its exposure to the weak domestic economy. In fact, year-over-year sales declined at each of the company's major segments -- corrugated packaging, consumer packaging, and recycling -- giving investors little optimism for a near-term turnaround.

Now what: While demand might be down, management expects to see some margin improvement in upcoming quarters. According to Chairman and CEO James Rubright:

During the fourth fiscal quarter, we implemented a $50 per ton increase in domestic containerboard and we are following that with price increases in boxes and sheets. We expect that by the end of the March quarter we will be realizing most of the anticipated benefit of those increases.

With the stock now trading at a cheapish forward P/E of nine, thanks to today's plunge, buying into that optimism might not be a bad move.

Interested in more info on Rock-Tenn? Add it to your watchlist.

Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool owns shares of Rock-Tenn Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2092860, ~/Articles/ArticleHandler.aspx, 10/22/2016 5:06:37 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 7 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
RKT.DL $0.00 Down +0.00 +0.00%
WestRock CAPS Rating: ****