1. Setup Recap
Compass Minerals reported after the close on Monday, Dec. 8.
The pre-earnings call was for a down gap (~-5%) with low confidence (55%), expecting an in-line quarter with in-line forward framing.
2. What Actually Happened
The print itself was better than feared:
- EPS: -$0.17 vs -$0.23 forecast (beat, narrower loss).
- Revenue: $227.5M vs $223.59M forecast (beat).
- Outlook: guided FY2026 adjusted EBITDA $200M–$240M and discussed an ~8% expected decline in sales volumes.
3. Price Action
- Prior close (Mon): $20.63
- Open (Tue): $19.75 → -4.3% gap
- Close (Tue): $17.78 → -13.8% close-to-close
No reversal — the selling accelerated through the session.
4. Attribution: Why It Moved
This was a “good print, uneasy tape” outcome:
- Even with beats on EPS and revenue, the stock traded like investors weren’t comfortable with the forward demand/volume picture.
- The market reaction suggested the quarter was treated as backward-looking, while the outlook commentary kept risk premium elevated.
5. What Worked / What Didn’t
What worked:
- Directional call (down) was right on both gap and close.
What didn’t:
- The model framing (in-line) didn’t capture how quickly the tape could swing to “still not enough,” even on a beat.
6. Lessons & Playbook Updates
- For volatile turnarounds: the market can punish the stock even on a beat if the forward volume narrative stays cloudy.
- If the stock is priced for improving fundamentals, it may still demand an outlook that removes uncertainty — not just beats estimates.
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