Why Great Lakes Dredge & Dock Sank Today

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 Great Lakes Dredge & Dock (NASDAQ: GLDD  ) fell 18% today after the company said it would have to restate earnings.

So what: The company actually reported fourth quarter earnings, which included revenue of $207.1 million and net income of $0.3 million. But the bigger news was that it discovered revenue that wasn't correctly reported during 2012, so it will be restating second and third quarter results.

Now what: The impact isn't huge, just an overstatement of $3.9 million in revenue in the second quarter, and $4.3 million in the third quarter, but it's the principle that counts. Investors hate restatements, and they give us less confidence in what the company is reporting. I wouldn't worry about this too much because it was caught quickly, and I think shares can recover from here.

Interested in more info on Great Lakes Dredge & Dock? Add it to your watchlist by clicking here.


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