Why Shares of Chart Industries Inc. Plunged Today

Is this meaningful or just another movement?

Travis Hoium
Travis Hoium
Apr 29, 2014 at 2:57PM
Industrials

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 Chart Industries, (NASDAQ:GTLS) fell as much as 13% today after reporting earnings, but settled back to a 4% loss later in the day.

So what: First-quarter revenue fell 2.7% to $266.2 million -- well short of analyst expectations of $300.4 million. On the bottom line, net income fell 23% to $12.0 million, or $0.41 per share on an adjusted basis, which was way short of the $0.66 expectation.  

To make matters worse, management lowered its earnings guidance range for the full year by $0.10 to $3.00-$3.40 per share.

Now what: Weakness in the biomedical respiratory business and delays in liquefied natural gas projects were blamed for the shortfall, and there's validity to those arguments. The full-year results show that revenue and earnings will be back-loaded, indicating that these projects will just be delayed, not eliminated. I think this dip presents a long-term buying opportunity for a company in growth markets, despite its disappointing quarter.