Why U.S. Ecology's Shares Popped

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 waste management company U.S. Ecology jumped as much as 21.3% in early trading before settling into a 12% gain midway through the day.

So what: The driver of today's pop was third-quarter earnings, which were much better than investors expected. Revenue rose 16% to $53.1 million and net income was up 18% to $10.3 million, or $0.56 per share. Excluding one-time items, earnings were $0.53 per share, which came in $0.07 ahead of estimates.  

Now what: Treatment and disposal revenue rose 10% sequentially and transportation revenue was up 48% on strong bookings, which look like they'll continue. Management increased full-year earnings guidance to $1.68-$1.73 per share from a previous range of $1.45-$1.55 per share. Shares aren't cheap at 24 times the top end of that range, but I think 2014 looks strong and the company is positioned well to capture growth in the future.

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The article Why U.S. Ecology's Shares Popped originally appeared on Fool.com.

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