Why Shares of Core Laboratories N.V. Plunged Today

Is this meaningful or just another movement?

Travis Hoium
Travis Hoium
Apr 24, 2014 at 4:04PM
Energy, Materials, and Utilities

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 Core Laboratories N.V. (NYSE:CLB) dropped as much as 10% today after reporting earnings.

So what: Revenue was up slightly in the quarter to $262.9 million but fell short of the $283.0 million analysts were expecting. Net income increased 7.8% to $61.1 million, or $1.35 per share. On an adjusted basis, earnings of $1.45 per share were a penny short of estimates.  

Now what: Management said that weather resulted in about a 5% negative impact on earnings in the quarter. The concern was that a company priced as a growth stock isn't growing the top line much at all, which is concerning despite increasing margins. I'd take a cautious approach given the stock's high price and would wait for either a lower price or more growth before jumping in.