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Crocs: bad news trumps good news in earnings release

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Crocs (NASDAQ: CROX), manufacturer of those ubiquitous, brightly colored plastic shoes (I like to think of them as a modern-day "Jelly Shoe"), reported earnings after the closing bell today. Altogether, the announcement was a mixed bag of tricks and treats.

Third-quarter net income sprinted higher to $56.5 million, or 66 cents per share, more than doubling year-ago results. YAY! The results were 3 cents above analysts' earnings estimates. Double YAY!

Revenue was also solid, spiking 130% to $256.3 million! But this headline figure failed to match analysts' estimates of $258.4 million. OH.
But! The firm lifted its 2007 earnings-per-share target to $1.94 to $1.98 per share, with revenue expected to reach $820 million to $830 million! YAY! Unfortunately, these new figures fail to meet analysts' earnings and revenue expectations of $1.97 per share and $835.7 million, respectively. OH.

In a press release, company president/CEO Ron Snyder assured investors that "Our year-to-date performance has been marked by significant gains in sales and earnings, robust international expansion, a number of high-profile licensing agreements and the continued build out of our global infrastructure."

Investors responded with a resounding BOO! ... in after-hours trading, the stock has plunged nearly 23% to slip below the $60 level. This was the site of robust put trading today (at the November 60 strike) and is also home to the equity's 80-day moving average. It's possible that in the light of the trading day tomorrow, CROX could benefit from this double-tiered technical and options-related support, but it still won't be a pretty day for the bulls, even if an intraday reversal is in the cards.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

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Last updated: November 10, 2009: 08:28 AM

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