Investors in Motley Fool Hidden Gems recommendation Mine Safety Appliances (NYSE:MSA) have had a rough time of it in 2005. While the year started out well, by the end of February the company's stock began to seriously underperform the market. Not coincidentally, that was just about the time that Mine Safety reported fiscal 2004 earnings that fell a bit short of analysts' hopes.

But the thing about investing is, if you ignore short-term market wobbles and focus on the fundamentals, things tend to work out in the end. That goes for companies and investors alike.

Case in point: On Thursday, Mine Safety reported $0.57 per diluted share in profits for its first quarter. Analysts had expected no more than $0.48. Thus, the company more than made up for the $0.06 "shortfall" experienced three months ago. In fact, add up the two quarters' results, and Mine Safety is now ahead of the game with $0.03 more than analysts had expected it to earn over the past six months.

Oh, and the stock price? That's on its way back up, too -- to more than $43 by the close of trading Thursday.

The company accomplished that by keeping a lid on costs and continuing its efforts to boost sales in international markets generally (and Europe in particular). Compared to the first quarter of 2004, Mine Safety increased its sales by 17.2%, with both European and international business recording greater than 20% growth.

As we all know, raw material costs have been rising, however, and that posed a problem because the cost of goods sold increased a bit faster than overall sales. To offset the resulting margin pressure, Mine Safety held increases in both administrative and research and development expenditures under 10%. This fiscal restraint helped the company expand its net margins by 110 basis points despite the higher components costs, achieving a 9.4% net margin in Q1 2005.

It may not be the most exciting business in the world, but in mining as in investing, it's better to avoid excitement than seek it out. Slow and steady -- that's the way to succeed.

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Fool contributor Rich Smith has no position in either of the companies mentioned in this article.