Why MYR Group Inc.'s Shares Plunged 20% Today

By Travis HoiumMarketsFool.com

What happened

Continue Reading Below

Shares of MYR Group Inc. (NASDAQ: MYRG) fell as much as 19.6% in trading Thursday after the infrastructure construction company reportedfirst-quarter earnings. At 1:50 p.m. EDT, the stock was sitting near its low, trading down 19.5% on the day.

So what

Revenue was up 18.3% to $300.1 million but net income dropped from $2.0 million a year ago to $1.2 million, or $0.07 per share. Analysts were expecting earnings of $0.29 per share, so the bottom-line result was well below expectations.

More From Fool.com

Image source: Getty Images.

Management blamed bad weather and some projects with short duration for the decline in margins and net income.

Now what

The first quarter wasn't strong, and the rest of the year doesn't look a lot better. Management said backlog dropped from $688.8 million to $660.9 million in the three months ending March 31, which means barely two quarters of work. With margins down and a backlog on the decline, there's too much risk for me to jump into MYR Group's shares today. This is an infrastructure bet that doesn't look like it will pay off near term unless there's a big federal investment in the grid, which seems unlikely at this point.

10 stocks we like better than MYR GroupWhen 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 MYR Group 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 May 1, 2017

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.