Please ensure Javascript is enabled for purposes of website accessibility

Why Granite Construction's Shares Dropped

By Travis Hoium - Nov 4, 2013 at 3:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Is this meaningful or just another movement?

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 (GVA 1.35%) 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Granite Construction Incorporated Stock Quote
Granite Construction Incorporated
GVA
$29.24 (1.35%) $0.39

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.