Why Chart Industries 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 Chart Industries were flying higher today, up as much as 18% after topping estimates in its second-quarter earnings report.

So what: The industrial gas equipment specialist said it pulled in an adjusted per-share profit of $0.77, a penny better than expected, while revenues grew 24.3% to $298.3 million against estimates of $296.4 million. The company also received $369.7 million in orders in the last quarter, bringing its backlog to a record $664 million, 13% higher than the quarter before. That figure does not include the liquefied natural gas, or LNG, equipment order from PetroChina worth $50 million that was announced today.

Now what: There's no question this was a strong report, including 24% top-line growth and a rapidly expanding backlog, but the 18% pop in share price may be exaggerated. Much of the growth is driven by LNG demand as the natural gas boom in the U.S., and a desire to move to cleaner fuels into China, is spurring robust growth in that area. With a P/E above 40, Chart's shares are certainly pricey, but the potential in LNG is huge, so keep an eye on demand for it.

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The article Why Chart Industries Shares Jumped originally appeared on Fool.com.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Chart Industries. 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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