Wireless Facilities Learns a Hard Lesson
'Taint what you do, it's the way that you do it.
That old jazz standard should have been playing Monday when Wireless Facilities
But these are fixed-price contracts, so they're only as valuable as WFI's ability to keep costs down. That, as the song goes, is what gets results. But when investors took a look at WFI's results Monday morning, they quickly drove its stock down 23%. WFI's third-quarter EPS was in line with analysts' forecasts, but only because of a $1.9 million benefit for income taxes.In the fourth quarter, the performance is expected to be worse: CEO Eric DeMarco said EPS could fall to 5 cents, or half what analysts had been expecting. Fourth-quarter revenue will be "roughly flat" with the third, the company said. After a daylong tug-of-war between bulls who held faith in WFI's long-term opportunities and bears who question its ability to get there, the stock had drifted back up to $5.95 by Monday's close, a moderate recovery from the morning carnage but still a 13% drop. Volume was nine times heavier than normal. That ambivalence is also reflected in the reaction of analysts to WFI's report. "I'm bullish on the industry in general," said Seth Potter of Punk Ziegel, which has no underwriting relationship with the company. "And the company itself is diversified. But there's always something like this coming up. This is not an unusual situation this quarter." Potter is maintaining a market perform rating on WFI.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV