Gardner Denver (GDI) recently reported better-than-expected first-quarter results, and management upped its guidance for the full year.
Gardner Denver is a Zacks #2 Rank stock with a reasonable valuation. It trades at 17.2x 2010 the Zacks Consensus Estimate and 14.5x the 2011 Zacks Consensus Estimate.
Growth and Income
Analysts estimate that Gardner Denver will generate long-term EPS growth of 20.0%. The stock also has a dividend yield of 0.4%.
Business
Gardner Denver designs, manufactures, and markets engineered industrial machinery and related parts and services primarily in North America, Europe, Asia, South America, Africa, and Australia.
Strong First-Quarter Results
On April 22, Gardner Denver reported revenue of $422.2 million, down 8.7% from the year-ago quarter. The company earned $0.62 per share, topping the Zacks Consensus by 10 cents, or 19.2%.
Gardner Denver has beaten the Zacks Consensus Estimate for the last three quarters by an average 20.8%.
CEO Barry Pennypacker said that “the global economy is in the early stages of recovery. Demand for OEM products continued to improve during the quarter, as did requirements for well servicing pumps, and aftermarket parts and services. In these businesses, we have benefited from investments in process improvements, which have resulted in improved margins and increased manufacturing velocity, and enabled us to respond to some of the increased demand.”
In addition, the company increased its EPS guidance. Gardner Denver expects to earn $0.60-$0.64 per share in Q2 and $2.75-$2.85 for 2010. The company’s previous EPS guidance for 2010 was $2.55-$2.62.
Estimates Moving Higher
Analysts covering the stock lifted their estimates after the company reported solid first-quarter results and upped its 2010 guidance.
In the last 30 days, the Zacks Consensus for 2010 is up 22 cents, or 8.4%, to $2.83, and the Zacks Consensus for 2011 is higher by 19 cents, or 6.0%, to $3.35.
The Chart
GDI shares peaked on April 26, along with the rest of the market. Its stock dropped as much as 14% in the market’s sell-off last week. GDI has recovered some of those losses, but it is still down about 9% from its 52-week highs.
