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 Chinese advertiser Focus Media (NAS: FMCN) were flying high today, gaining as much as 10% in intraday trading after the company announced second-quarter results.
So what: Generally, Wall Street cooks up estimates for the earnings a company will report, and if the company's numbers exceed those estimates, investors rejoice. For its second quarter, Focus Media reported total revenue growth of 46%, to $179 million. On a non-GAAP basis (which is adjusted primarily for stock compensation), Focus' second-quarter earnings per share came in at $0.44. And those Wall Street numbers? They had Focus at just $0.37 in per-share profit on $163 million in revenue.
Now what: As if that wasn't enough, Focus Media also made investors smile by providing third-quarter guidance that also topped analysts' views. At the midpoint of management's range, the company is expected to report third-quarter revenue of $176 million and non-GAAP earnings per share of $0.49. Current Wall Street estimates call for $174 million in revenue and $0.43 in EPS.
Focus' stock currently trades at 20 times full-year earnings estimates, but if it continues with this kind of growth and upside surprises, that may look like a very reasonable price in hindsight.
Want to keep up to date on Focus Media?Add it to your watchlist.
At the time thisarticle was published 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.Fool contributorMatt Koppenhefferdoes not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter@KoppTheFoolorFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.
Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.