Schweitzer-Maudit International Inc. (SWM) recently posted solid second-quarter results that beat estimates on higher prices and lower costs. Estimates and the company’s share price both spiked in reaction to the news.

Company Description

Schweitzer-Maudit International Inc. manufactures and sells paper and reconstituted tobacco products to the tobacco industry. The country does business in 90 countries and has a market cap of $718 million.

Shares of SWM have been rallying since early March with the market, but recently gapped open higher after the company reported solid second-quarter results on August 5.

Second-Quarter Results

Sales were down 9% from last year to $183 million, but due to higher prices and aggressive cost cutting, earnings easily beat expectations, coming in at $1.02 against the Zacks Consensus Estimate of 45 cents.

Schweitzer-Maudit noted that for the first 6 months of the year, net cash from operations was up to $22.9 million from $12.3 million last year. Capital spending was also down, totaling $4.6 million from $24 million.

Estimates Spike

After word of the good quarter hit the Street, estimates surged higher. The current-year added almost $2.00, climbing to $3.74 per share. The next-year estimate is bullish, pegged at $4.45, a 19% growth projection.


Based upon the current-year estimate, this stock has a P/E multiple of 12.5X, a discount to the overall market with the very nice growth projection in tow.

The Chart

Shares of SWM have been trending higher since early March, but recently gapped open higher after the company reported the strong second-quarter results. Take a look below.


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