Top Performer for Mon: OMNOVA Solutions (OMN)

Earnings estimates for OMNOVA Solutions Inc. (OMN - Snapshot Report) have shot up in the past 7 days in reaction to its fiscal third-quarter report, which saw the company issue a positive earnings surprise.

Shares have moved higher by approximately 10.42% Monday, giving the chemicals company a spot on the Zacks #1 Rank Top Performers List. Volume has topped 1.1 million shares, which is more than double the daily average of nearly 520,000.

OMN develops, manufactures and markets emulsion polymers, specialty chemicals and decorative and building products for a variety of industrial, commercial and consumer markets.

The company is 1 of 5 names representing the Chemicals-Specialty industry on the Zacks #1 Rank List. The other 4 companies are W.R. Grace & Co. (GRA - Snapshot Report), Quaker Chemical Corporation (KWR - Snapshot Report), The Lubrizol Corporation (LZ - Snapshot Report) and NewMarket Corporation (NEU - Snapshot Report).

Earnings Estimates

The past 7 days have seen healthy increases in earnings estimates for both this fiscal year and next. The Zacks Consensus Estimate for the fiscal year ending November 2009 is at 46 cents per share, which is up 27.7% from 36 cents in a week. The company enjoyed upward revisions from 2 of 3 covering analysts.

Meanwhile, the Zacks Consensus Estimate for the fiscal year ending November 2010 is 70 cents per share, marking a sharp gain of nearly 50% from 47 cents in 7 days. The advance reflects an upward revision from 1 of 2 covering analysts. The guidance is also 52% atop the consensus for this fiscal year.

Fiscal Third Quarter

On Sep 29, OMN announced its fiscal third-quarter results, attributing its performance to broad-based cost reductions, effective raw material sourcing and commercialization of innovative new products. Specifically, the company said it's Performance Chemicals segment and Decorative Products Asian businesses led the way.

Earnings per share reached 24 cents, topping the Zacks Consensus Estimate by as much as 118%. Over the past 4 quarters, OMN has beaten 3 times and missed once.

Net sales came to $186.1 million, which was down 22.3% from $239.5 million a year earlier. The company blamed the drop on lower selling prices and weak market demand, which were partially offset by market share gains and penetration into new adjacent markets.

"Because of the initiatives we have taken and continue to take, the company expects to continue to generate significantly improved year-over-year earnings in the fourth quarter," said Chairman/CEO Kevin McMullen.

At the moment, the Zacks Consensus Estimate for the fiscal fourth quarter is at 13 cents per share, compared to 3 cents in the year-ago quarter. That guidance is up more than 18% in 7 days.