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 Titan Machinery (NASDAQ:TITN) dropped as much as 18% today after releasing earnings.
So what: Fiscal fourth-quarter revenue rose 29.2% from a year ago to $784.5 million, beating estimates of $694.8 million. But earnings per share were just $0.73, $0.19 below estimates, and the company's guidance of 2014 earnings of $2.00 to $2.30 was well below the $2.59 estimate.
Now what: Gross margin fell to 13.3% in the fourth quarter from 15.3% a year ago, which is why earnings fell short of expectations. The construction business accounted for much of that decline, and the company will work to reverse the trend in 2014. This isn't good news for the company or the stock, but at 11 times forward earnings (on the low end), the stock isn't a bad value, and if the economy picks up, so should earnings.
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