Why Shares of UTi Worldwide Inc. Plunged 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 shipping company UTi Worldwide (NASDAQ: UTIW  ) fell as much as 11.7% today after the company reported earnings.

So what: In the fiscal fourth quarter, revenue dropped 2.1% to $1.08 billion and the company lost $50.7 million, or $0.48 per share. On an adjusted basis, the loss was $0.15 per share, which was $0.04 worse than estimates.  

Now what: A $725 million debt refinancing may stave off complete failure, but the economy and operations need to improve significantly for long-term viability. Management continues to provide optimistic projections for cost cutting, but unless revenue improves that won't matter. This just isn't a company I would be betting on right now, primarily because the top and bottom lines are headed in the wrong direction.

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