What: Shares of Continental Building Products Inc (NYSE:CBPX) dropped as much as 13.1% today after it reported third-quarter earnings.
So what: Sales fell 5% to $108.2 million in the quarter and net income fell 55% to $4.2 million, or $0.10 per share. After adjusting for one-time items, the company said it earned $0.25 per share, but even that was behind the $0.30 estimate from Wall Street.
Management said that wallboard volumes declined 3.9% in the quarter and sale prices fell slightly as well.
Now what: The earnings miss was big given the fact that building is supposed to be picking up in the U.S. It also calls into question a big increase in profits investors are expecting in the second half of this year and into 2016. Analysts were targeting a profit of $1.35 per share in 2016, which looks overly optimistic given the direction of results today.
I would take a cautious approach to Continental Building Products' shares today and wait to see consistent growth before jumping in, because I don't see the improvement Wall Street is hoping for on the horizon.