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: Websense (Nasdaq: WBSN) dropped 15% in intraday trading Wednesday after reporting disappointing earnings and lowered guidance for end user billings.

So what: Second-quarter non-GAAP EPS of $0.35 grew 13% year over year, but fell short of the $0.38 consensus estimate. GAAP EPS rose 57% to $0.11, and revenue rose 11%. Approximately $2.9 million of the company's $3 million increase in pre-tax income resulted from an accounting change regarding revenue recognition. Likewise for $3.2 million of the $8.8 million increase in revenue.

Now what: Management blamed the disappointment on macroeconomic factors in Europe and a sales reorganization. The press release touted a number of positives, including increasing demand for security in light of a number of well-publicized computer attacks. But meaningful EPS growth could prove elusive with the company facing a tough economy, in the middle of a sales reorganization, and deriving almost all of its second-quarter pre-tax income increase from an accounting change. That makes it hard to justify the non-GAAP P/E ratio of 19 times and GAAP P/E ratio of 35 times based on yesterday's intraday price of $22.68.

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