Why Shares of Horsehead Holding Corp. Popped Today

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 Horsehead Holding Corp. (NASDAQ: ZINC  ) jumped 10% today after reporting earnings.

So what: First-quarter revenue was down 6.9% to $110.1 million and fell slightly below the $110.9 million estimate. Net income fell 75% to $700,000, but on an adjusted basis the $0.02 per share profit was six cents better than estimates.  

Now what: Horsehead is being helped by low expectations more than great performance, but with challenges in the first quarter, that's about the best investors could have expected. The start-up of the Mooresboro plant is really key for the company, and if it performs as expected, management sees $90-$100 million of addition EBITDA from the facility. Startups often cost more than expected, so I'd take a cautious approach, but we should be able to get a feel for the operational direction of the plant by the end of the year.

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