What: Shares of engine maker Briggs & Stratton Corporation (NYSE:BGG) were up 11.5% at 2:45 p.m. EST on Thursday after its quarterly results and outlook topped Wall Street expectations.
So what: Briggs & Stratton shares have slumped during the past few months on concerns over its exposure to slowing global growth. However, solid Q2 results -- adjusted EPS of $0.34 vs. the consensus of $0.18 on revenue of $413.4 million -- coupled with upbeat guidance are quickly easing those worries. In fact, adjusted gross profit margin increased 90 basis points over the year-ago period, to 17%, giving analysts plenty of positive vibes over Briggs & Stratton's cost structure, product mix, and competitive position going forward.
Now what: Management now expects full-year 2016 earnings in the range of $1.25 to $1.41 per share on revenue in the range of $1.9 billion to $1.96 billion. According to Chairman and CEO Todd Teske:
We expect modest industry growth in the upcoming season here in the U.S. and we maintain some caution regarding the global economy. Looking forward to the upcoming U.S. lawn and garden season, we have gained additional placement of our engines on lawn and garden products as compared to our placement last year. In addition to introducing new products to the market this spring, we will be expanding our offering of new products that we have launched over the past several years to give consumers and commercial users around the world greater access to this innovation.
With the stock now up more than 20% from its 52-week lows, and trading at a P/E of about 20, however, I'd wait wait for some of the excitement to fade before buying into those prospects.
Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.