Why CSG Systems Shares Popped (but Lost It)

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 CSG Systems (NASDAQ: CSGS  ) started the morning about 12% higher following an after-hours pop but quickly settled into gains of about 4% as the market digested the company's earnings report and forward guidance.

So what: CSG's revenue for the fourth quarter was $198 million, ahead of the $187.5 million analysts sought. Its earnings per share, at an adjusted $0.67, also came in well ahead of the $0.48 consensus. Going forward, CSG's full-year expectations for 2013 are between $755 million and $775 million on the top line, producing $2.23 to $2.33 in EPS. Both numbers surpassed what analysts were looking for -- the consensus was $747.5 million in revenue and $1.95 in EPS.

Now what: CSG is still well off the highs it reached late last year after a big pop fell apart, but unlike that episode, this one hasn't resulted in a big boost to its underlying P/E. The company currently trades near multiyear lows on that metric despite a solid rise through 2012. Traders might have decided to take their profits this morning, and S&P has maintained a hold rating on the stock because of the possibility of pricing concessions with Comcast (NASDAQ: CMCSA  ) . However, if CSG's EPS guidance is to be believed, there ought to be reason to take a closer look.

Want more news and updates? Add CSG Systems to your Watchlist now.

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