The expectations game tripped up Racine-based Twin Disc Monday, as its stock price lost nearly 19% in value after the company posted a highly profitable quarter.
Twin Disc, a manufacturer of marine and power transmission equipment, reported net earnings of $5.9 million in its fiscal second quarter, an increase of 45.2% or 51 cents per diluted share. While that compared favorably with the $4.0 million, or 35 cents per share from a year earlier, it was below the forecast of Wall Street analysts, which ranged from 56 cents to $1.09 per share with an average projection of 76 cents per share.
As a result, the company’s stock dropped Monday from $39.40 per share to $32 per share.
Twin Disc spokesman Chris Eperjesy told the Racine Journal Times that Wall Street was expecting a repeat of the previous quarter, when it reported earning of $9.6 million and 83 cents per share.
However, the company’s numbers remain strong, as strong demand for oil and gas transmission systems increased Q2 sales from $75.2 million last year to $82.9 million, a 10.4% rise.
Sales for the first two quarters reached $164.3 million, up 20% over the $136.6 million reported in the second half of 2010.
