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 contractor Granite Construction (NYSE:GVA) dropped today after reporting third-quarter earnings.
So what: Revenue rose 2% in the third quarter to $741.6 million and net income dropped 70% to $11.0 million, or $0.28 per share. Analysts were expecting $900.8 million in revenue and earnings of $0.78 per share, so clearly investors were disappointed in the results.
Now what: Revenue recognition in the construction business can be lumpy so I wouldn't get too worked up over any single quarter. The positive data point was that backlog increased to $2.8 billion at the end of last quarter from $1.6 billion a year ago. I don't think the results were as bad as they look on the surface and wouldn't change my investing thesis today.