Superior Essex, Inc.

Superior Essex, Inc. (SPSX) shares have been on a fierce rally over the last week, jumping from just above $31 to their current location of over $39; a very impressive short-term return of over 30%. This price spike comes on the heels of the company's first-quarter results, reported on May 1, in which adjusted earnings per share were up close to 50% from the same period last year.

Superior Essex, Inc. manufactures and supplies wire and cable products for various industries in Europe, North America, and the Asia Pacific. The company was founded in 1996 and is based in Atlanta, Georgia.

First Quarter Results

Superior reported solid first-quarter results on May 1. Revenue was up to $757 million from $696 million last year. Earnings were effected by a one-time restructuring charge of $9.6 million. Excluding this item, earnings would have been 69 cents per share, up from 45 cents per share last year.

Superior also noted that core business revenue at constant copper, one of the company's business segments, was up 12% from last year. This increase includes the benefits from acquisitions and favorable currency translations.

The successful quarter marks the fourth time in four quarters that the company has surprised and beaten analyst estimates, having done so by an average of 14 cents, or 26%.

Bullish Outlook

CEO Stephen Carter mentioned that even though the company has been vulnerable to global economic slowdowns in North America and Europe, he believes the company is well positioned to successfully traverse these obstacles. "For the second quarter of 2008, we expect economic conditions in Europe and North America to remain generally unchanged. Nonetheless, we should continue to benefit from the 2007 magnet wire acquisitions on a year-over-year basis."

In reaction to Superior's solid quarter and favorable outlook, the analyst community has upgraded their earnings projections. Within just the last seven days, the current-year estimate has tacked on 30 cents and advanced to it current projection of $3.48 per share.

With the recent boost in earnings, the company's valuations look even more attractive. Based upon current-year projected earnings, Superior's P/E multiple is a scant 10X.

The Chart

As previously mentioned, Superior shares have been rallying with force. The key to the formation on the chart is this stock's ability to hold itself in the much higher territory. Since the big surge, shares have been able to consistently creep higher and establish higher highs. This is definitely a bullish signal. The next target is the 52-week and all-time high just above $40. Take a look at the chart below.