Please ensure Javascript is enabled for purposes of website accessibility

Why TimkenSteel Corp.'s Shares Plunged Today

By Travis Hoium – Feb 1, 2016 at 4:11PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Last week's earnings beat expectations, but the stock is giving back gains today.

What: Shares of TimkenSteel Corp. (TMST 3.53%) dropped as much as 29% in trading on Monday before settling to a 21% loss late in trading.

So what: The stock surged 75% on Friday after the company reported earnings that beat expectations. Fourth-quarter revenue fell 49% to $206.6 million and net loss was $25.5 million, or $0.58 per share, but that exceeded expectations by $0.10 and investors were excited that TimkenSteel generated $18 million in free cash flow for the period.  

The reaction today was due to investors taking gains off the table, not because of any change in the company's position.

Now what: TimkenSteel may have beaten Wall Street's guess at earnings, but it's still experiencing a massive decline in business and continued losses and demand from energy and heavy machinery customers shows no signs of turning around. An earnings beat is welcome news on Wall Street, but the fundamentals behind TimkenSteel's business are still terrible and that's going to keep me out of the stock today.  

Travis Hoium 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

TimkenSteel Corporation Stock Quote
TimkenSteel Corporation
$15.55 (3.53%) $0.53

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.