Why Stewart Enterprises' 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 cemetery and funeral expert Stewart Enterprises (Nasdaq: STEI  ) were getting boosted by investors today as shares rose as much as 12% in intraday trading after the company reported second-quarter results.

So what: The headline here -- as is the case with most post-earnings pops -- is that Stewart's quarterly results were better than what investors had expected. For the quarter ending in April, the death-care specialist managed $0.13 in adjusted, per-share earnings, topping the $0.09 average estimate from Wall Street analysts. That bottom line represented a 30% jump over the same quarter last year, even as sales grew just 2.3%.

Now what: CEO Thomas Kitchen lauded the strong performance of all aspects of Stewart's operations -- cemetery property sales were up while gross profit increased, funeral-service profitability was improved thanks to cost controls, and preneed funeral sales were up 18% year over year. "In fact," Kitchen said, the first two quarters of 2012 have been "the best start to a fiscal year in preneed sales in over five years."

Whether or not the same pace keeps up in the quarters ahead, this steady, long-term performer appears poised to continue plugging forward.

Want to keep up to date on Stewart Enterprises? Add it to your watchlist.

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Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.


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