Why Headwaters Incorporated's 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 building materials maker Headwaters (NYSE: HW  ) jumped 11% today after releasing earnings.

So what: Revenue rose 12% to $197 million and the company swung to a profit of $11.0 million, or $0.15 per share. That was short of the $198.7 million in revenue and $0.18 per share in earnings analysts expected but bullish statements about the future overshadowed last quarter's results.  

Now what: Management reduced debt by $24 million in the quarter and 2014 debt maturity is down to a manageable $15.6 million. They also said that the company was entering a positive cash flow cycle and EBITDA is expected to improve this year to $110 million-$125 million. That expected improvement is what's helping drive the stock higher, not just the fiscal third quarter results.

Interested in more info on Headwaters? Add it to your watchlist by clicking here.


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