Why Atkore International Group Stock Dropped 22% on Tuesday

MarketsMotley Fool

What happened

Shares of electrical raceway products manufacturer Atkore International Group Inc. (NYSE: ATKR) are down 21.9% as of 2:05 p.m. EDT. Atkore reported its fiscal third-quarter 2017 earnings this morning, and the results fell short of analyst expectations.

Continue Reading Below

So what

Analysts had been looking for Atkore to report profits of about $0.44 per share on sales of $424.5 million in Q3. Instead, the company earned only $0.41 per share, diluted -- and sales were only $397.7 million.

Thus, while Atkore grew its sales year over year (by about 0.5%), grew its profits a healthy 24% year over year, and delivered "EPS results that are in line with our guidance," the results still fell short of what Wall Street was expecting.

Now what

The bigger concern is what comes next. According to data provided by Yahoo! Finance, analysts had been hoping that Atkore would close out this year with $1.57 billion in total sales, and profits (probably pro forma) of $1.57 per share. Now, with Q3 a disappointment and fiscal Q4 already halfway over, it appears likely that Atkore will come up short.

Revising its guidance for the year as a whole, Atkore now says its "adjusted EPS" for fiscal 2017 will range between $1.37 and $1.45 per share. It's hard to say what that will work out to in terms of generally accepted accounting principles, and management gave no guidance adhering to this method. What does seem clear, though, is that the results will fall short of expectations -- for the second quarter in a row.

No wonder investors are upset.

10 stocks we like better than Atkore International Group Inc.When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Atkore International Group Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of August 1, 2017

Rich Smith 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.