Why Boise Cascade Company's Shares Tumbled 17% Today

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 building materials company Boise Cascade Co. fell as much as 17% today after reporting disappointing earnings.

So what: Fourth quarter sales rose 8% to $862.0 million and net income jumped 60% to $15.7 million, or $0.40 per share, but that wasn't enough to impress investors today. Wall Street analysts had expected $871.8 million in revenue and earnings of $0.53 per share and the market often reacts negatively after missing these targets.

Now what: Boise Cascade's drop today seems to be more of an indication of expectations getting ahead of themselves than it is weakness in the company. A 60% increase in net income is great for any company and for the full year adjusted earnings were up 69%. With shares trading at 18 times trailing earnings and Boise Cascade posting solid sales and earnings growth I think the sell-off is very overdone today.

The article Why Boise Cascade Company's Shares Tumbled 17% Today originally appeared on Fool.com.

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.