Why Shares of PGT, Inc. 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 PGT  (NASDAQ: PGTI  ) fell 15% today after reporting earnings.

So what: First quarter revenue was up 26.6% to $62.7 million, and net income was up slightly to $3.4 million, or $0.07 per share. But that fell a penny short of expectations, and that was enough to sink the stock today.  

Now what: Earnings may have been a bit lighter than expected, but long-term I don't think there's a big reason to change your investment thesis. Revenue is growing quickly and SG&A costs are falling as it does. Margin pressure in the quarter was a result of lower pricing on a big project and purchasing glass from third party vendors, but a new glass plant will be completed this year and should help margins. Long-term I think the investment thesis is still in place, and this isn't a day to sell shares after a small earnings miss.

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