What: World Fuel Services Corp's (NYSE: INT)stock was down by nearly 14% in midmorning trading on Friday. Fueling the plunge was the company's weaker-than-expected second-quarter earnings report.
So what: The global fuel logistics company reported second-quarter non-GAAP net income of $37.9 million, or $0.53 per share. Not only was that well off from the year-ago period, when the company earned $57.9 million, or $0.81 per share, but it missed the consensus estimate by $0.18 per share.
While the company posted record volumes in all segments, seasonality and low prices along with reduced volatility in its marine segment "significantly affected profitability," according to CEO Michael Kasbar. Its marine and land segments were hardest hit, as segment gross profit dropped 23% and 19% sequentially, respectively. That more than offset stronger profitability in World Fuel Services' aviation segment, which increased by 3% over last quarter.
All that said, the company does expect a rebound in its results in the second half of the year. Furthermore, its balance sheet continues to strengthen, giving it plenty of capital to deploy for both organic growth and strategic investments.
Now what: Investors don't like to be disappointed, and are showing their displeasure by selling shares. That said, World Fuel Services sees its results turning a corner in the second half and remains optimistic about its long-term growth prospects. Investors, on the other hand, want to see it before they'll believe it.
The article Why World Fuel Services Corp's Stock Is Plunging 14% Today originally appeared on Fool.com.
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