Why Shares of CARBO Ceramics Dropped 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 CARBO Ceramics (NYSE: CRR  ) dropped as much as 19% today after the company released earnings.

So what: First quarter revenue dropped 9.5%, to $147.7 million, below the $153.4 million estimate from Wall Street. On the bottom line, earnings per share were $0.76, well below the $0.90 per share estimate. 

Now what: The good news is that CARBO Ceramics is still profitable; the bad news is that profit is dropping like a rock. Increased competition, particularly from Chinese companies, has hit the company hard, and will continue to pressure earnings throughout 2013. I'm cautiously optimistic that industry conditions will improve, and nuggets of positive news will push profit higher later in the year -- but not enough to buy today. It's better to wait until the worst is over and buy CARBO after it sees improvement than try to catch a falling knife.

Interested in more info on CARBO Ceramics? Add it to your watchlist by clicking here.


Read/Post Comments (0) | Recommend This Article (1)

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: 2387623, ~/Articles/ArticleHandler.aspx, 11/27/2014 6:32:29 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