What happened

Forterra's (NASDAQ:FRTA) stock surged on Wednesday morning, bubbling up more than 36% by 11:15 a.m. EST. Driving the rebound was the market's reaction to the company's third-quarter results.

So what

On the surface, Forterra's results didn't look all that great compared to last year's or to analysts' expectations. The company recorded $444.3 million in sales during the quarter, which was only $3 million higher than the year-ago period and $6.9 million below the consensus estimate. The company posted a net loss of $11.5 million, or $0.18 per share. That was well below the $8.4 million, or $0.19 per share, it earned in the year-ago period, and missed expectations by $0.22 per share.

Water gushing out of a blue pipe.

Image source: Getty Images.

During the quarter, Forterra faced several headwinds that impacted its financial results. Hurricanes Harvey and Irma, for example, cut $3.7 millionĀ from the bottom line. The company also closed the sale of its U.S. concrete and steel pressure-pipe business during the quarter. That divestiture reduced sales by $8.9 million, and the company recorded a $31.6 million loss on that transaction, which is what pulled it into the red.

Despite those headwinds, Forterra noted that its underlying earnings as measured by adjusted EBITDA came in at $60.9 million, which was above the midpoint of its guidance range. Driving that result was a combination of higher selling prices and lower costs.

Now what

In commenting on what lies ahead, CEO Jeff Bradley stated in the third-quarter press release that he expects continued improvement in the company's earnings due to its "ongoing initiatives, a solid backlog, and favorable market conditions." That optimism could continue driving the stock higher as that earnings improvement materializes, especially since shares are still down more than 67% this year even after today's pop. That said, given its wild ride this year, investors need to have an iron stomach before diving into this water stock.