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What: Shares of absorbent material maker Oil-Dri Corporation of America (NYSE:ODC) dropped 14% today after the company released earnings.
So what: Fiscal first quarter 2014 earnings are out and net sales were up 3% to $63.5 million and net income fell 36% to $2.9 million, or $0.41 per share. Higher manufacturing costs as well as increased marketing spending resulted in the weaker bottom line.
Now what: Management even said it was disappointed in the results and investors sold off as well. The biggest concern I have is that higher manufacturing costs don't appear to be a short-term challenge because natural gas prices and packaging costs will likely continue to rise. I don't think there's a reason to buy today and would like to see more growth and margins improving before jumping in.
Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.