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's happening: Shares of Post Holdings (NYSE:POST) rose as much as 13% on Friday after the company announced fiscal-second-quarter results that blew past Wall Street's expectations and raised guidance for the full fiscal year.

Why it's happening: Here's how the headline numbers shook out:



Analysts' consensus estimate

Q1 Revenues – BEAT

% Surprise

$1.053 billion


$1.02 billion

Q1 Earnings-per-share – BEAT

% Surprise






Analysts' consensus estimate

2015 EBITDA*

$585 million-$610 million

$580 million

Source: Thomson Financial Network, Zacks Investment Research, Post Holdings

The pendulum has swung all the way to the other side: The huge "beat" on earnings-per-share in the March-ended quarter follows a massive miss in the previous quarter (a ($1.15) per-share loss versus a consensus estimate of ($0.15)).

Note also that the new guidance range for full-year EBITDA (earnings before interest, taxes, depreciation and amortization -- a measure of profits) of $585 million to $610 million represents a significant increase from the previous range of $540 million to $580 million. The company cited three factors to explain the revision: "better than expected year-to-date performance, the completion of the acquisition of MOM Brands [~$50 million] and the impact of avian influenza [~ negative $20 million]."

Regarding the last of those factors, Post Holdings said it now estimates that 14% of its egg supply has been affected by avian influenza, compared to its first estimate of 10%. The company, which sells All Whites egg whites, also warned that the development of avian influenza and its impact on the egg market could alter the company's profit expectations "materially."

With that said, the biggest contributor to the progression in results is the addition of acquired businesses -- quarterly revenues rose 140% year-on-year. Furthermore, earlier this week, the company announced it had completed the acquisition of MOM Brands, which manufactures ready-to-eat cereals in the value segment, with resulting cost synergies of $50 million (annual run rate.)

Finally, it's nice to see a business investing for growth. Post Holdings expects to spend $40 million on capital expenditures related to growth projects in the current fiscal year, nearly a third of its total capital expenditures forecast ($125 million to $135 million.) That's a pleasant surprise in a market in which companies appear to prefer spending cash on buying back their own shares.

In a somewhat overheated market, with Post Holdings shares valued at just 9.2 times cash flow, per research firm Morningstar, it doesn't seem all that surprising the stock should "pop" on evidence of growth and the prospects for more of the same.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.