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What: Shares of construction and engineering specialist Shaw Group (NYS: SHAW) climbed 15% Wednesday after the company's quarterly results and guidance topped Wall Street expectations.
So what: Shaw's shares have slipped on weak revenue and shrinking margins over the past year, but the first-quarter beat -- EPS of $0.48 versus the analyst consensus of $0.43 -- suggests that the worst may be behind it. Although Shaw's top line still dipped in the quarter, strong backlog growth and falling input costs are giving Mr. Market plenty of good feelings about a sustainable turnaround.
Now what: Looking ahead, Shaw sees adjusted full-year 2012 EPS of $2.05-$2.15, easily topping Wall Street's forecast of $2.02. "Our overall outlook for the year continues to be positive as we maintain our complete focus on project execution and increasing bookings," said Chairman and CEO J.M. Bernhard Jr. More important, with Shaw continuing to trade at a forward P/E discount to peers like Fluor (NYS: FLR) and Jacobs Engineering (NYS: JEC) , there should still be time to buy into that optimism.
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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies 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 Fool's disclosure policy always gets a perfect score.