What happened

Shares of small-engine specialist Briggs & Stratton (NYSE:BGG) ran up as high as 11% before retracing to end the day up 9.4% Friday.

So what

Briggs & Stratton beat analyst expectations for $0.81 per share in profit in its fiscal third quarter, earning $0.83 instead. The company missed expectations on revenue, however, booking $597 million in sales for fiscal Q3 versus Wall Street's predicted $615.8 million. And sales for the quarter declined 1% year over year.

Regardless, investors seem to have been encouraged that while sales fell a bit short of expectations, profits on those sales did not. In fact, not only did Briggs & Stratton exceed expectations on profits, but an improved gross margin, combined with a smaller share count (accomplished with buybacks) helped the company to grow net profits by 36%.

Faceless figure in a tie holding a pointer next to a red stock chart going up.

Briggs & Stratton stock is going up. Image source: Getty Images.

Now what

With Briggs & Stratton's fiscal year now three-quarters done, the full-year results are coming into sharper focus as well. Management says it still expects to close out this fiscal year with between $1.86 billion and $1.9 billion in sales. Profits will range between $1.31 and $1.46 per share.

Taken at the midpoint, that works out to a current fiscal year P/E ratio of about 17 -- significantly cheaper than Briggs was looking as recently as Thursday, and even cheaper than the 24 P/E the stock currently sports, when valued on trailing earnings. As time goes buy and more profits roll in, this stock is only getting cheaper and cheaper. So no wonder investors are enthused.

Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.