Shares of infrastructure play Mueller Water Products (MWA 2.58%) closed down 11.4% on Tuesday after reporting weak profits and even weaker sales in Monday evening's Q2 2019 earnings report.
Expected to report pro forma profits of $0.14 per share on sales of $252 million, Mueller said it actually earned just $0.12 per share on $234 million in sales.
And then it dropped its guidance to boot.
And that was the good news. The bad news is that Mueller's GAAP earnings actually came out to only $0.07 per share (albeit up a penny from the $0.06 earned in last year's Q2). Sales rose only a small fraction of 1%, versus the 8% gain that Wall Street had been counting on, a fact that Mueller blamed partly on slower than anticipated residential construction and severe weather.
Mueller hopes to do better later in the year, citing expected "growth in all end markets during the second half of 2019, with municipal spending growth in the mid-single-digit range, residential construction growth in the low-single-digit range, and natural gas distribution growth in the mid-single-digit range."
That being said, management sliced about 1 percentage point of growth off its previous guidance, and says it expects sales to grow only between 7% and 9% this year, versus 2018 levels. Adjusted EBITDA is expected to grow from 12% to 15% relative to last year, but Mueller did not give any guidance for GAAP earnings.