Why Pike Electric Shares Jumped
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 Pike Electric were shining brighter today, gaining as much as 10% after posting a strong quarterly earnings report.
So what: The utility-support provider said revenue jumped 59% to $273 million and earnings per share grew all the way from $0.14 a share to $0.67 in the quarter. Storm restoration revenue was significantly higher as Superstorm Sandy knocked out power across a wide swath of the Eastern Seaboard, so this quarter's results don't represent a trend. Still, the company grew in all core areas, and construction revenue increased by 46%.
Now what: Shares cooled off after coming out of the gate flying and finished up 3.4%. Energy solutions providers such as Pike seem to have a promising future ahead of them, with the increased likelihood of catastrophic storms caused by climate change, and the widespread switch in the utility industry from coal-burning plants to ones that use natural gas. One of Pike's biggest clients, for example, is Duke Energy, which just announced a plan to retire two coal-fired plants two years earlier than planned.
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