Why Forum Energy Technologies Inc's Shares Plunged 12% Today

What: Shares of Forum Energy Technologies Inc dropped as much as 12% today after the company reported very disappointing earnings.

So what: Revenue for the second quarter fell 34% to $284.4 million and net income dropped 78% to $8.9 million, or $0.10 per share. Revenue fell short of the $312.2 million Wall Street analysts had projected and even earnings adjusted for restructuring costs of $0.16 per share were $0.02 behind estimates.

Now what: It's actually commendable that Forum Energy Technologies made any profit in the quarter considering the deterioration in drilling. North American land rig count dropped 51% year over year and production completions were down as well, both of which affected revenue. But the results were below expectations, and expected earnings of $0.08 to $0.13 per share in the third quarter were below analysts' target of $0.17 per share.

Buying this stock now is a risk, and growth will depend on an improvement in drilling conditions. But I think the risk/reward profile is looking stronger than the market is pricing in, and when drilling does recover, this stock will be a big winner for long-term investors.

The article Why Forum Energy Technologies Inc's Shares Plunged 12% 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.