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 CARBO Ceramics (CRR) dropped as much as 19% today after the company released earnings.

So what: First quarter revenue dropped 9.5%, to $147.7 million, below the $153.4 million estimate from Wall Street. On the bottom line, earnings per share were $0.76, well below the $0.90 per share estimate. 

Now what: The good news is that CARBO Ceramics is still profitable; the bad news is that profit is dropping like a rock. Increased competition, particularly from Chinese companies, has hit the company hard, and will continue to pressure earnings throughout 2013. I'm cautiously optimistic that industry conditions will improve, and nuggets of positive news will push profit higher later in the year -- but not enough to buy today. It's better to wait until the worst is over and buy CARBO after it sees improvement than try to catch a falling knife.

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