What happened

Shares of bottled-water stock Primo Water (NASDAQ:PRMW) closed down 16.1% on Wednesday, after the company reported earnings Tuesday following the close of trading.

Expected  to lose $0.02 per share on sales of $69.8 million, Primo either beat or missed earnings, depending on how you look at it. Calculated according to GAAP accounting standards, Primo lost $0.03 per share -- a miss. But when adjusted for one-time items, Primo actually earned $0.01.

Sales beat estimates at $70 million.

Water circling a drain

Image source: Getty Images.

So what

However Wall Street interprets the results, Primo seems fine with them. CEO Matt Sheehan, at least, says earnings and sales were "in line with our expectations," and the company remains "a market leader in dispenser sales at retail."

Yet the fact remains: Despite beating on sales, Primo's revenue declined 5% year over year, and gross margin on those sales slipped 110 basis points to 26.4%. Increased advertising costs did earnings no favors, and as a result, Primo's profits from one year ago evaporated, leaving the company with a loss for Q1.

Now what

Looking ahead, Primo predicted Q2 2019 sales will range from $76.5 million to $79.5 million -- about 3% better than the company did in last year's Q2, but below analyst forecasts.

The good news is that Primo thinks things will continue to improve as the year progresses. By the end of 2019, the CEO says we can expect to see full-year sales of from $317 million to $325 million -- 6.3% better than last year, and ahead of Wall Street estimates.

Sadly for shareholders, it looks like today at least, investors are focusing more on Primo's weak Q2 guidance, than on its much stronger prediction for the year as a whole.