Why Intermec 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 data-collection specialist Intermec (NYSE: IN  ) were looking brighter today, gaining as much as 13% after the company posted a strong earnings report.

So what: Revenue in the quarter actually declined 9% to $192.8 million, but adjusted EPS shot up to $0.17 from just $0.01 a year ago. Revenue was also partly affected by negative currency translation rates. Commenting on the quarter, CEO Allen Lauer said, "Improved bookings in North America and Latin America contributed to a relatively significant increase in backlog." Intermec also launched or announced a number of products during the quarter, including a new wireless handset for distribution centers, and an HTML 5 browser, which will "enhance workflow efficiency."

Now what: Considering analysts had expected a $0.03 EPS loss from Intermec, investors should be pleased with the results, but there are at least a few concerns here. Declining revenue is never a good sign, especially for a small company that's had a number of losing quarters recently, and management is actively searching for another CEO to replace the 74-year-old Lauer. The company's also said it's evaluating strategic alternatives, which could mean a buyout. Prospective investors may want to wait for more information on these fronts before getting on board.

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Jeremy Bowman has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. 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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