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 General Cable (NYSE:BGC) dropped 18% today after announcing preliminary third-quarter results.
So what: Third-quarter revenue was $1.56 billion and net income came to $15.6 million, or $0.31 per share. Analysts were expecting revenue of $1.64 billion and earnings of $0.55 per share.
General Cable is restating earnings for the past two years, so there's no comparison to previous results. Management has found potential asset impairment in its Mexican business and that's what's holding up filing past and present results.
Now what: The restatements are troubling and investors never like when accounting surprises come along. In the most recent quarter, weak demand for product hurt results as North American projects got pushed into later quarters. Shares may look cheap at 10 times forward estimates but, with infrastructure spending failing to pick up and accounting challenges ahead, I don't think this is a time to buy shares of General Cable.