Why Summit Materials Stock Plunged 17% at the Open Today
Shares of building materials company Summit Materials (NYSE: SUM) fell sharply as trading got under way on Oct. 28. Within the first hour of trading the stock had fallen by as much as 17%. The news that drove the drop happened after the close on Oct. 27, but it was pretty clear that sleeping on the company's earnings release didn't make investors any more happy about the quarterly update.
In its earnings release, Summit Materials frequently highlighted both its third-quarter and year-to-date results. For example, year to date through September, revenue was higher by roughly 2.5%, which isn't bad given the global coronavirus pandemic. However, in the third quarter revenue was down 3.1% year over year. Adjusted EBITDA, meanwhile, was up 3.1% through the first nine months of the year, but it was down 8.1% when looking at just the third quarter. Although it's understandable that Summit wanted to stress the positives, it's also pretty clear that the third quarter wasn't a great one. Adding to the negative mood was the fact that Summit missed Wall Street expectations on both the top and bottom lines.
Image source: Getty Images.
Source Fool.com
