Why Pall's Shares 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 Pall Corporation (NYSE: PLL  ) fell as much as 10.6% in early trading after reporting earnings and full fiscal year guidance.

So what: Fiscal third-quarter revenue fell 3%, to $641.2 million, and net income dropped 7%, to $73.1 million, or $0.64 per share. On an adjusted basis, earnings were $0.74 per share, $0.01 above expectations.

What concerned investors was the company's net income guidance for the full year of $2.95 to $3.05 per share, a reduction of $0.10 at the top end. Analysts were expecting $3.07 for the full year, so it appears the company won't hit that level.

Now what: This isn't a huge earnings miss, and it looks like early trades were a major overreaction by the market. The stock is currently down about 4%, which is probably reasonable given the numbers. But I still don't think this is a buying opportunity given the fact that revenue is down and, at best, the stock trades at 22.6 times this year's earnings.

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


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