Why ACCO Brands' 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 office supply maker ACCO Brands (NYSE: ACCO  ) fell as much as 13% in early trading today before settling in at a 5% drop.

So what: First quarter earnings released last night showed a 22% jump in revenue, to $352 million, which was still well short of the $386.2 million estimate from Wall Street. On the bottom line, the company's loss fell from $17.4 million a year ago to $9 million, or $0.07 per share on an adjusted basis, but this fell short of the break-even results analysts predicted. 

Now what: The acquisition of Meadwestvaco's consumer and office business drove most of the revenue growth, so this was expected by investors. Management did say it expects an adjusted profit of $0.95 to $1.05 per share, which would give the stock about a 6.5 P/E ratio. I'm cautiously optimistic in the company's value, but if revenue slips at all going forward, I would be prepared to jump ship.

Interested in more info on ACCO Brands? Add it to your watchlist by clicking here.


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