Why GrafTech International'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 graphite maker GrafTech International (NYSE: GTI  ) jumped as much as 23% today after reporting earnings.

So what: Revenues dropped 5.5% from a year ago to $303.1 million, but were slightly ahead of estimates. Net income swung from a profit of $29.6 million to a loss of $7.6 million, or $0.06 per share. But on an adjusted basis, which takes out one-time items, earnings per share of $0.04 were $0.02 ahead of estimates.  

Now what: Investors had already prepared for a bad quarter, so even the small adjusted profit was good news. Management was also fairly bullish on the U.S. and EU markets improving next year and construction picking up. Despite potential improvements, I don't like the trends we've already seen and lowering the top end of full-year EBTIDA guidance by $10 million to a range of $145 million-$155 million wasn't good news either. I'm not buying the pop and would rather see bottom-line improvement before buying in.

One stock to check out today
There are profitable companies that present a buying opportunity for long-term investors. The Motley Fool's chief investment officer has hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2013." To find out which stock it is and read our in-depth report, simply click here. It's free!


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2708093, ~/Articles/ArticleHandler.aspx, 4/23/2014 8:50:11 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement