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Shares of Precision Castparts (NYSE: PCP) have dropped by nearly 14% today, after the component manufacturer released disappointing preliminary results for its fiscal third quarter after Thursday's closing bell.
Why it's happening
Precision now expects quarterly revenue to fall in the range of $2.42 billion to $2.47 billion, which is well below Wall Street's $2.56 billion consensus. The company's earnings per share from continuing operations should range from $3.05 to $3.10, which is also far under analysts' $3.41 EPS consensus. Based on current guidance, Precision should grow by roughly 3.6% year over year on the top line and by 4.2% on the bottom line.
The company blamed this shortfall on weak demand from its oil and gas customers, which are obviously dealing with massive pricing problems in their own industry. Precision also said "destocking" at an unidentified large commercial aerospace customer (there aren't too many of these in the world) also had a negative impact on its third quarter.
CEO Mark Donegan sounded a hopeful note in a press release by claiming that Precision is "positioned for growth across our markets" despite the turbulence in the oil and gas industry. However, the company's release also said Precision does not plan to offer preliminary results in the future, which is rarely a positive sign for a company aiming for growth.