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What happened
Shares of countertop maker Caesarstone Sdot-Yam Ltd. (CSTE 5.78%) fell as much as 20.8% on Wednesday after the company reported third-quarter earnings. And as of 12:45 p.m. EDT, shares were still down 15.4% in trading.
So what
Revenue rose 5.5% in the quarter, to $144.3 million, and net income was up 12.8%, to $22.3 million, or $0.70 per share. The results fell short of the $152.8 million in revenue and $0.77 per share in earnings expected by analysts.
Management also said that full-year revenue would be $524 million to $534 million, which is well below the $553 million analysts were expecting. And it's the fact that long-term growth trends aren't going to hit expectations that is hurting the stock today.
Now what
Interestingly, most of the international segments was very strong for Caesarstone. Australia and Canada saw demand rise 21.8% and 13%, respectively, and Israel was up 6.4%. But U.S. and European revenue fell 5.4% and 1.2%, respectively, and led to the earnings miss.
I don't think it's worth panicking over the miss too much today. Shares are still trading at about 10 times forward earnings estimates, which isn't expensive for a company that's still growing. Investors may just need to dial back growth plans for the immediate future.
