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-Mark Holding Company (NASDAQ:CORE) fell nearly 13% Monday after the consumer goods distribution and marketing specialist announced disappointing fourth-quarter results and forward guidance.
So what: Quarterly net sales rose 4.7% year over year to $2.6 billion, including 5.6% growth in non-cigarette sales, and a 4.3% increase in cigarette sales. That translated to a 2.7% decline in net income to $14.6 million, or $0.62 per diluted share. Adjusted earnings before interest, taxes, depreciation and amortization climbed 15.3% to $36.1 million. Analysts, on average, were looking for higher earnings of $0.65 per share on sales of $2.65 billion.
Now what: For the full fiscal year 2015, Core-Mark sees net sales increasing to between $10.7 billion and $11.0 billion. That growth is expected to be driven by continue market share gains as Core-Mark assumes no new acquisitions or large customer wins. Meanwhile, adjusted EBITDA for the year should be between $125 million and $129 million, with adjusted earnings (which exclude around $16 million of estimated LIFO expenses) between $2.26 per share and $2.33 per share. Wall Street, for its part, was expecting significantly higher 2015 revenue and earnings of $11.26 billion and $2.63 per share, respectively.
In the end, that's not to say Core-Mark's weaker-than-expected results are indicative of a faltering business. The company just capped a reasonably solid 2014 and is expecting further growth in 2015. However, shares aren't exactly cheap relative to that growth trading around 27 times the mid-point of Core-Mark's expected 2015 earnings. For now, that's why I'm personally content continuing to watch Core-Mark from the sidelines.
Steve Symington 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.