Why FEI's Shares Popped

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of scientific instrument maker FEI (NAS: FEIC) are on a tear today, up more than 11% after the company reporting record results after Thursday's market close. Second-quarter revenue of $221.5 million was 5% higher than the year-ago quarter and 2% higher than the prior quarter. Net income saw greater improvement, up 16% over the year-ago quarter to $30.3 million, and up a more impressive 18% from the prior quarter. FEI beat analysts' estimates of $0.68 in EPS by $0.06, also contributing to its gains.

So what: Guidance for the upcoming quarter comes in right in line with analyst estimates. FEI projects $210 million to $220 million on the top line and $0.63 to $0.70 in EPS, against consensus estimates of $220 million in revenue and $0.67 in EPS. FEI now has $210.1 million in gross bookings, a slight sequential decline from last quarter's $221.8 million in bookings. Thanks to strong demand, FEI now boasts a $423.6 million order backlog to fulfill.


Now what: FEI is clearly not in bubble territory with a P/E of 20. Net income has been growing faster than revenue for some time, which is a great sign of the company's pricing power and sustained demand. Long-term shareholders have already seen nearly 60% growth over the past 52 weeks, so FEI's momentum isn't a passing fad. If you were sitting on the sidelines before, now might be a good time to take a closer look.

Want more news and updates? Add FEI to your watchlist now.

The article Why FEI's Shares Popped originally appeared on Fool.com.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more news and insights.Motley Fool newsletter services have recommended buying shares of FEI. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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