Why Shares of PowerSecure International, 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 PowerSecure International  (NYSE: POWR  ) dropped an incredible 61% today after reporting a terrible first quarter.

So what: Total revenue was up 17.4% in the first quarter to $52.8 million but higher expenses led to a $4.3 million loss, or $0.19 per share. Revenue fell well short of the $59.3 million Wall Street expected, and even on an adjusted basis, the loss of $0.17 per share was way short of the $0.02-per-share profit that analysts anticipated.  

Now what: Management says it mis-timed making investments in emerging businesses and delays to large utility projects will lead to significantly lower revenue and earnings this year. For perspective, before today's report, analysts expected $0.70 per share in earnings for 2014 and now management doesn't expect to report a profit until Q4 when it will barely break even. With all of those problems ahead, the drop in the stock was massive and the company now trades for less than expected sales for the year, so there's value if management can turn around operations.

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