What: Shares of Continental Building Products Inc 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.
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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.
The article Why Continental Building Products Inc's Shares Plunged 13% 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.