Please ensure Javascript is enabled for purposes of website accessibility

Why Array Technologies Stock Plummeted Today

By Chris Neiger - May 12, 2021 at 11:12AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Rising steel and freight costs hurt first-quarter results.

What happened

Shares of Array Technologies (ARRY 9.34%) tumbled this morning after the company reported worse-than-expected first-quarter results late yesterday. 

The tech stock had dropped 34% as of 10:44 a.m. EDT.

So what 

Array's adjusted diluted earnings of $0.19 per share just missed analysts' consensus estimate of $0.20 per share for the quarter. Meanwhile, the company's revenue of $245.9 million beat Wall Street's consensus estimate of $240.8 million.

A red line pointing down on a dark red background.

Image source: Getty Images.

"Revenues for the first quarter of 2021 were in line with our expectations and adjusted EBITDA was slightly below our expectations as a result of higher than expected logistics costs," Array Technologies CEO Jim Fusaro said in a press release.

Fusaro also mentioned in the company's earnings report that increasing steel and freight costs will continue to hurt the company's margins into the second quarter and "potentially in subsequent quarters if prices do not normalize," although he said he expects the price increases to be temporary.

But investors were very concerned about the company's latest results and with today's share price drop Array's stock is down 55% over the past 12 months. 

Now what 

Aside from missing analysts' earnings estimate, investors were concerned that Array Technologies won't be able to meet its previous 2021 guidance. 

The company's CFO, Nipul Patel, said, "Given the continuing increases we are seeing in steel and freight costs as well as our ongoing review of open contracts to assess what costs we will pass on to customers, we are not able to affirm our previously provided guidance for the full year."

The company will update guidance at a later time, but based on the company's massive share price decline today some investors aren't waiting around to hear it. 

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Array Technologies, Inc. Stock Quote
Array Technologies, Inc.
ARRY
$23.30 (9.34%) $1.99

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
389%
 
S&P 500 Returns
125%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/13/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.