Paul,
A well managed business makes long term strategies, but things rarely go as planned. This requires adjustments. Using the same excuses for 3 Qs is no justification for a falling bottom line. There are no excuses in well managed companies, they look forward, and when things go wrong, they make adjustments to compensate.
The minimum wage increase was almost a year ago and is no longer a valid excuse. All contracts taken before the wage increase should have expired long ago and the new contracts based on the higher wages and current Peso value.
"A customer moved to China to be closer to customer base" They had an increase in revs and a major decline in earnings.
"Customers decided to push out start up" Again, revs up, earnings down. Did the customer place an order or not? Never heard of a customer signing a contract then saying "wait, we don't want it for a few more months". What kind of deals do they sign? Sit around and twiddle thumbs waiting for customer to say 'go'?
I can accept this for a Q, perhaps 2Q, but not when they use basically the same excuses for nearly a year.
Downside risk? I expect the price to stay in the $8-9.50 range this Q. If they repeat an earnings report like this one, another decline. With a decent report, about the amount of gain as loss with a bad one. It's 50/50 upside/downside for 3 months and I don't like the odds.
I just took a loss and am not inclined to be gracious about ELAMF.
A disgruntled opinion -g-,
Ron
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