Why Shares of Mueller Water Products, Inc. Plunged 13% Today

By Travis Hoium Markets Fool.com

What happened

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Shares of Mueller Water Products, Inc. (NYSE: MWA) fell as much as 12.5% in trading on Friday after the company reported fiscal second-quarter results. At 2:55 p.m. EDT, shares were still down 10.8% on the day.

So what

Net sales were up 1.3% to $119.7 million and adjusted income from continuing operations were up 42.6% to $15.4 million, or $0.09 per share. Mueller Technologies drove the growth with a 20.7% increase in sales to $18.1 million, offset by a small decline in Mueller Co. sales to $181.6 million.

Image source: Getty Images.

Earnings per share hit analyst estimates on the market, but there was an expectation that Mueller would report $206.6 million in sales for the quarter. The miss on the top line is likely what traders are focused on today.

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Now what

Management said that bad weather in the western U.S. and weak international sales were the drivers of the worse-than-expected quarter. The weather was a temporary setback, but lagging international sales may be a long-term concern for investors. With weak growth and an uncertain international segment, I don't think shares look very attractive at 23 times this year's earnings estimates. For that reason, this isn't a discount I will be jumping on today.

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Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.