Shares of Arcosa Inc (ACA) took a sharp dive on Wednesday, plummeting 5.07% during intraday trading despite the company reporting better-than-expected first-quarter results. The significant drop suggests that investors may be focusing on the year-over-year decline in earnings rather than the beat on analyst expectations.

Arcosa reported its Q1 2025 earnings after the market close on Tuesday, revealing adjusted earnings of $0.49 per diluted share. While this figure surpassed the FactSet analyst consensus of $0.19, it marked a considerable decrease from the $0.73 per share earned in the same quarter last year. Revenue for the quarter came in at $632 million, up from $598.6 million in the previous year and above the analyst expectations of $614.5 million.

Despite maintaining its full-year 2025 revenue guidance of $2.8 billion to $3.0 billion, which aligns with analyst projections, the market's negative reaction suggests that investors may be concerned about the company's profitability and future performance. The sharp stock decline, even in the face of better-than-expected results, could indicate that Arcosa's shares were priced for perfection, and the year-over-year earnings decline has prompted a reassessment of the company's valuation by market participants.