Cytec Industries Inc. (CYT) exceeded expectations for the third consecutive quarter. Higher estimates continue to come in, keeping CYT as a Zacks #1 Rank (Strong Buy).
Company Description
Cytec Industries Inc. is a specialty chemical and materials company. The company’s customers operate in a wide variety of fields including aerospace, electronics, plastics, mining and several others.
Beat the Street
Cytec easily topped Wall Street’s expectations in a Apr 22 earnings release. Earnings per share came in at 66 cents, 13 cents higher than forecast.
The company earned almost $25 million during the first quarter, which is up from virtually breaking even one year ago. Sales jumped to $787 million, which is up 29%.
Good History
Cytec beat the Zacks Consensus Estimate 25% last quarter, giving the company 3 consecutive surprises. However, the previous 2 surprises were even more impressive at 33% and 78%.
Bullish Outlook
Results alone are not enough these days. Analysts also look for guidance from the company it self, and Cytec provided a solid outlook. Management expects earnings to come in at the top end of their expectations, if not higher.
Upon the release, analysts began raising their expectations. After 9 revisions from 6 analysts, the full-year Zacks Consensus for 2010 is up 17 cents, to $2.45. Next year’s forecasts are up 23 cents to an average of $3.05.
If Cytec can hit these targets earnings will more than double this year, from $1.14 in 2009, and will be up 24% in 2011.
Confidence in Recovery
With the double-dip recession worries all but non existent, industrial output is ramping up. As a result, inputs into the manufacturing process are getting plenty of attention and that bodes well for commodity companies and specialty chemical companies like Cytec.
The Chart
Shares rose sharply on the earnings news as you can see in the highlighted portion below. Unfortunately a market-wide sell off weighed on the stock. However, this could be a nice buying opportunity as you can get in at the same level as before the earnings release.
Zacks Growth Trader service Zacks Investment Research
