Shares of Briggs & Stratton (NYSE:BGG) fell as much as 17.2% in early trading Thursday after the company reported fiscal second-quarter 2019 results. At 11:30 a.m. EST shares were still down 16.8% on the day and showed no signs of recovery.
Revenue was up 13.2% in the quarter to $505 million as sales into commercial markets continued to be strong. Net loss was $2.6 million, or $0.07 per share, as losses from buying back debt and business integration charges hit the bottom line. Without those one-time items, earnings were $8.4 million, or $0.20 per share.
Analysts were expecting only $463.9 million in revenue, but they did see $0.26 in earnings per share, which was where the earnings disappointment came in. On a guidance level, investors also weren't happy to see an earnings outlook of $1.10 to $1.30 per share, lower than Wall Street's $1.44 expectation.
A lot of the guidance miss is out of Briggs & Stratton's hands, with management citing weather-related weakness in Australia and Europe. To add to matters, Sears' bankruptcy is expected to hurt sales by $30 million next year. When management doesn't see the growth investors are expecting, it can cause a stock to reset based on lower expectations, which is what we see today. Briggs & Stratton as a company isn't broken, its future earnings are just not quite as valuable as investors thought before earnings came out.
Check out the latest Briggs & Stratton earnings call transcript.