Why Air Transport Services Shares Dropped

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 aircraft industry supplier Air Transport Services (NASDAQ: ATSG  ) fell 11% today after the company reported earnings.

So what: Revenue fell 9.5% in the second quarter to $138.9 million. Worse yet, net income from continuing operations fell 38% to $6.9 million, or $0.11 per share. That fell short of the $0.15 per share analysts expected and caused the big sell-off today.  

Now what: Revenue and expense trends both worked against the company this quarter, although management said the trajectory slowed in July. I still don't think this is a buy sign despite the fact that shares are trading at nine times trailing earnings. Until revenue turns around and profits improve I'll be staying away from this stock.

Interested in more info on Air Transport Services? Add it to your watchlist by clicking here.


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