Chart Industries, Inc.

Chart Industries finds itself in a hot sector, as energy moves to the forefront of the American economic agenda. The company has surprised on estimates 4 quarters in a row by an average of 21.01%. Chart is trading at only 11.6x forward earnings.

Company Description

Chart Industries, Inc. (GTLS - Snapshot Report) manufactures equipment used in the production, storage and end-use of hydrocarbon and industrial gases. The products are used for the purification, liquefaction, distribution, and storage of gases such as natural gas, other hydrocarbons, helium, nitrogen, argon, oxygen and carbon dioxide.

The company serves a wide variety of sectors, including energy, biomedical, food, entertainment, alternative fuels and aerospace. It has operations in 8 states and an international reach to Australia, China, the Czech Republic, Germany and the United Kingdom.

Sales Leap 18% in the Second Quarter

The energy sector is hot, especially for those that are servicing it. Chart Industries continues to reap the benefits of lots of cash sloshing around the sector. On July 31, it reported second quarter earnings that beat Wall Street estimates by 26.67%.

Net income more than doubled to $22.2 million, or 76 cents per share, from $8.4 million, or 32 cents per share, in the year ago period. Analysts expected 60 cents per share.

Sales jumped 18% to $197.8 million from $167.6 million a year ago. Orders jumped from the first quarter to $227.1 million from $164.9 million. The company said orders for the second quarter were strong across all operating segments, particularly in the Distribution and Storage segment and that its markets remained strong.

The backlog grew 20% year-over-year to $498.1 million from $415.3 million. The backlog also rose 6% from the first quarter.

Chart Industries Raises 2008 Guidance

The company is bullish about the remainder of the year given the strong year to date performance and the current order backlog. The sales guidance was raised to $770 to $800 million from $745 to $780 million.

The EPS forecast was also raised to $2.55 to $2.65 from $2.33 to $2.45 per share.

Consensus Estimates Rise

In response to the new guidance range, covering analysts have raised third quarter and full year estimates. Third quarter estimates rose 4 cents to 69 cents from 65 cents per share. For the full year, estimates jumped to $2.68 from $2.45 per share, which is slightly higher than the company's guidance range.

Value Fundamentals

Chart Industries is a Zacks #1 Rank (Strong Buy) stock. Its forward P/E is 11.67. GTLS's price-to-book is 2.66. The company has a strong five year return on equity (ROE) of 18.57%.

Read the full analyst report on GTLS