Why TravelCenters of America LLC Stock Got Crushed Today

What happened

Shares of TravelCenters of America LLC (NASDAQ: TA) tumbled today as the truck-stop operator posted disappointing results in its first-quarter report.

As of 3:24 p.m., the stock was down 26.2%.

Image source: TravelCenters of America LLC.

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So what

The national chain of gas stations and truck stops said its loss per share widened from $0.26 a year ago to $0.74. Adjusting for litigation costs and non-cash write-offs, the loss per share was $0.41. That compares to analyst expectations of a loss of $0.17 per share.

Revenues increased 21% to $1.39 billion as the company acquired new travel centers, though that was also short of estimates of $1.47 billion.

Fuel sales volume decreased 5% to due to weak demand for gasoline, continued fuel efficiency gains, and a soft freight trucking environment.

Now what

TravelCenters' business is seasonal: The company tends to report a loss in the cooler months and a profit in the warmer months, as both gas prices and travel miles rise with the temperature. But even so, the widening loss per share is disconcerting.

Despite growth through acquisitions, management seems unable to make those deals count on the bottom line, as operating margins have fallen and the stock has tumbled over the last two years.

There is clear underlying value in the business, and the stock may be appealing as a takeover or a turnaround play. But unless the company makes such a pivot, I'd expect the stock will continue to struggle.

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Jeremy Bowman 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.