Why Granite Construction'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 contractor Granite Construction (NYSE: GVA  ) fell 11% today after the company reported earnings.

So what: Revenue fell 6%, to $504.8 million, way below the $600.2 million in revenue that analysts had expected. That, of course, hurt the bottom line, where net income was $18 million, or $0.46 per share, below the $0.53 estimate.  

Now what: The revenue miss is the most troubling because construction spending is down in the company's markets. With shares trading at 27 times trailing earnings, investors are paying a lot for a company heading in the wrong direction. I'm going to pass on the discount today until we see some significant improvement in revenue.

Interested in more info on Granite Construction? Add it to your watchlist by clicking here.

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