Why Fuel Systems Solutions Shares Jumped

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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 Fuel Systems Solutions were getting pumped up today, climbing as much as 23% after a top-notch earnings report.

So what: The maker of fuel delivery systems said that earnings per share came in at $0.13, well ahead of analyst estimates at $0.08, while revenues inched up 1.9% to $111.1 million, beating the consensus at $106.5 million. The better-than-expected performance was not without obstacles as CEO Mariano Costamagna noted that sales of aftermarket kits were lower and felt pressure in Europe from the sluggish economy and rising competition. Fuel Systems also reaffirmed its sales guidance for the year at $400 million-$420 million, in line with estimates.

Now what: Despite beating expectations, the company's EPS was still down sharply from a year ago when it hit $0.36, as gross profit actually fell in the quarter even with the increase in sales. Analysts are expecting slim profits for the rest of the year, and slow growth next year. An earnings beat is always nice, but it seems like Fuel Systems has more structural problems to get over first.

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The article Why Fuel Systems Solutions Shares Jumped originally appeared on Fool.com.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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