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 power transmission and motion control products manufacturer Altra Holdings
So what: Shareholders should actually be thrilled at being down only 12%, because the stock had been down 21% earlier. For the quarter, Altra reported an adjusted profit of $0.24 on sales of $171.7 million. Wall Street had been looking for Altra to earn $0.33 on sales of $172.3 million. The company's 2012 forecast also came in at the low end of the forecast range. Profit is expected to range from $1.50 to $1.60 with sales of $740 million-$760 million.
Now what: Investors have a right to be skeptical given the laundry list of problems Altra gave for the weaker results. A plant shutdown due to automotive customer inventory adjustments, an extended holiday shutdown in Europe, and a rise in lower-margin products being sold during the quarter were the reasons Altra cited for the weakness. This doesn't seem like an overnight fix, and -- knowing this -- I'd keep my distance from the company even after today's drop.
Craving more input? Start by adding Altra Holdings to your free and personalized watchlist so you can keep up on the latest news with the company.
