Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of systems management software provider Quest Software (Nasdaq: QSFT) were knocked around in intraday trading, falling as much as 10% before recovering significantly.

So what: The initial reaction to Quest's fourth-quarter results was particularly negative as investors were disappointed by non-GAAP earnings per share of $0.40 which were flat with the prior year and below the $0.45 that Wall Street analysts were looking for. The underwhelming earnings number was driven by lower margins as revenue grew 11% and topped expectations.

Now what: Management glazed over the less-than-hoped-for fourth-quarter profits, instead focusing its comments in the earnings release to the quarter's revenue growth and the stronger bottom-line performance for the full year. Investors seem to have come around to management's optimism as the stock significantly pared its losses through the day. Though it's rarely a good idea to read too much into a single quarter's performance, investors will want to keep an eye on margins going forward to make sure that the fourth quarter isn't the beginning of a trend.

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