Why Shares of Mobile Mini Are Dropping Today
Image source: Mobile Mini.
What happened
Shares of portable storage and containment solutions provider Mobile Mini (NASDAQ: MINI) slumped on Tuesday following the company's third-quarter report. Mobile Mini missed analyst estimates on all fronts, sending the stock down about 10.5% by 11:30 a.m. EDT.
So what
Mobile Mini reported third-quarter revenue of $128.9 million, down 3.3% year over year and about $4 million below the average analyst estimate. The decline in revenue was driven by the specialty containment business, which contracted by 7% year over year. Strength in the portable storage business, which recorded year-over-year growth of 2.4%, partially offset this weakness.
Mobile Mini reached an all-time high for units on rent as of the end of the quarter, but higher sales representative turnover knocked down productivity. The company reported adjusted earnings per share (EPS) of $0.31, down from $0.35 in the prior-year period and $0.06 lower than analysts expected. EPS came in at $0.29 on a GAAP basis, down from $0.31.
In addition to reporting its results, Mobile Mini declared a cash dividend of $0.206, payable to shareholders of record on Nov. 9. The stock yields 3.15% following Tuesday's decline.
Now what
Mobile Mini CEO Erik Olsson pointed to the strength of the portable storage business while assuring investors that the company is working to drive revenue higher:
Steady growth since 2010 has been interrupted this year for Mobile Mini, driven by weakness in its specialty containment business and currency fluctuations. The stock has now tumbled about 47% since peaking in 2014, but the company remains highly profitable, producing a GAAP operating margin in excess of 20% during the third quarter. Investors will likely need a few more quarters of data in order to determine whether its problems are more than just a bump in the road.
A secret billion-dollar stock opportunity The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.
Timothy Green has no position in any stocks mentioned. The Motley Fool recommends Mobile Mini. 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.