Why Precision Castparts' Shares Jumped

Is this meaningful or just another movement?

Travis Hoium
Travis Hoium
May 9, 2013 at 4:53PM
Energy, Materials, and Utilities

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 Precision Castparts (UNKNOWN:PCP.DL) jumped as much as 10% today after the company released earnings.

So what: Revenue jumped 25%, to $2.44 billion, but fell short of the $2.51 billion estimate from Wall Street. Net income was up 23%, to $414.2 million, or $2.82 per share, ahead of the $2.76 per share estimate. 

Now what: The acquisition of Titanium Metals drove revenue growth, with sales up 31%. This looks like a well-timed acquisition that will continue to drive earnings, as aircraft and other products continue to use more titanium. I think the stock's 17 forward P/E ratio is very attractive considering the earnings beat, and shares can move higher from here.

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