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 defense supplier Esterline Technologies
So what: The company scaled back adjusted EPS guidance for the fiscal year, from $5.10-$5.25 to $4.87 to $5.00, blaming lower production of aircraft, such as the Hawker Beechcraft T-6B Trainer and the Airbus A380, as well as F-35 inventory rebalancing at Lockheed Martin
Now what: CEO Brad Lawrence said the slowdown causing the revised guidance was a temporary issue, and expressed confidence that his company’s "solid market positions optimize its ability to seize opportunities" as they arise. Defense is a notoriously cyclical industry, so investors shouldn’t be surprised to see speed bumps like this from time to time, but this shouldn’t change your overall investing thesis. A 6% haircut seems deserved considering the cut in projections.
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Fool contributor Jeremy Bowman holds no positions in the companies in this article. The Motley Fool owns shares of Lockheed Martin. The Motley Fool has a disclosure policy. We Fools may not 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.
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