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What: Shares of contractor Granite Construction
So what: At just $0.05 a share, Granite's earnings came in way off analyst estimates, who were expecting $0.33. Its $539.6 million in revenue also missed estimates by about 3%, as the company pointed to "one of the toughest construction markets our company, and our industry, has faced in recent times." The company also dialed down parts of its outlook, cutting revenue and gross profit targets in its Construction Materials segment and gross profit guidance in the Construction division, though it did elevate expected gross profit in the Large Project segment.
Now what: Wall Street is generally way off the mark with this company, so this earnings miss shouldn't be a huge surprise. In the last five quarters, the consensus has been off by 23% or more, and on both sides of the ledger. This is a highly cyclical industry, meaning numerical predictions are often meaningless. The second quarter was full of negative macroeconomic news, but things seem to be improving with some promising retail reports and better-than-expected employment numbers, which may explain the bounce-back in the stock today.
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Fool contributor Jeremy Bowman holds no positions in the companies above. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.