Why Dorman Products Shares Got Dinged

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 auto-parts maker Dorman Products (NASDAQ: DORM  ) were looking rusty today, falling as much as 12%, on a disappointing earnings report.

So what: The automotive aftermarket parts supplier said that revenue decreased 1%, to $135 million, and earnings per share shrank from $0.46, to $0.42. Analysts had expected a $0.52 per-share profit and $158 million in sales. The loss of a week in the calendar was partly to blame for the drop, but analysts had figured that into their projections. Without the calendar shift and a one-time inventory adjustment, sales would have increased 7%. CEO Steven Berman was still optimistic about 2013 despite the poor fourth quarter, and noted that earnings and sales still grew by double digits during all of 2012, the fourth year in a row the company has done so.

Now what: Dorman missed estimates by a considerable margin, and there are reasons to believe that this was just a temporary misstep. Gross profit actually improved in the quarter by 140 basis points, to 38.4%, and management said the increase in operating expenses was the result of increased product development and incentive compensation. Look for Dorman to bounce back next quarter.

Don't miss the next update on Dorman Products.


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.

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: 2270527, ~/Articles/ArticleHandler.aspx, 10/24/2014 8:49:01 PM

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...


Advertisement