Why Masonite International Corporation Stock Just Crashed 23%

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What happened

Shares of door manufacturer Masonite International (NYSE: DOOR) are down 22.6% as of 11:45 a.m. EDT on Thursday in response to yesterday's after-hours earnings report.

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So what

Masonite reported after close of trading Wednesday that its fiscal second-quarter sales increased 1% to $520 million. Profits, however, got kicked off the frame -- down 16% year over year to $0.89 per share. Masonite CEO Fred Lynch blamed a combination of "softer than expected demand, [unfavorable] foreign exchange [rates], and certain plant consolidations" for the disappointing results, and noted that "operating and distribution inefficiencies remained a challenge" for Masonite in the quarter.

Relative to Wall Street's expectations, Masonite also performed pretty badly. Analysts had predicted that Masonite would grow, not shrink, its profits in Q2 -- to $1.11 per share. Sales were expected to grow as well, to $546 million. So on both revenue and earnings, Masonite missed estimates.

Now what

Management did not give guidance on its expectations for earnings in the current fiscal third quarter, nor for the year as a whole, saying only that Masonite will "continue to take the actions we believe are necessary to improve our manufacturing and distribution performance."

As for Wall Street, analysts are still expecting the company to earn $4.13 per share this year -- 36% more than it earned last year. Having earned only $1.66 per share so far in the first half, however, Masonite is less than halfway to Wall Street's goal -- and with less than half the year remaining.

Things are not looking good for Masonite's chances, and another earnings miss (for the year at least) looks like a distinct possibility.

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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.