CIRCOR International, Inc.

CIRCOR is seeing big profits in the worldwide valve business as revenues jumped 25% in the second quarter. The company has surprised on earnings 3 out of the last 4 quarters by an average of 4.25%. CIRCOR's forward P/E is 12.78.

Company Description

CIRCOR International, Inc. (CIR - Snapshot Report) manufactures valves and related products for fluid-control systems. The company operates several manufacturing facilities in the United States, Canada, Europe and the People’s Republic of China.

Its customers include a large variety of industries across all aspects of the global economy including general industrial, food processing, aerospace, marine, compressed natural gas, oil and natural gas exploration, petrochemicals, semiconductors and textiles.

The company, a Zacks #1 Rank (Strong Buy), has two segments: Instrumentation and Thermal Fluid Controls Products Group and Energy Products Group.

The Instrumentation Group manufactures valves, fittings and controls for hydraulic, pneumatic, cryogenic and steam applications. The Energy Group manufactures a variety of valves for oil, gas and chemical processing applications. The company is one of the top 3 producers of ball valves for the energy industry.

Second Quarter Revenue Jumps 25%

On July 30, CIRCOR reported second quarter earnings that beat Wall Street estimates by a penny, even after it had raised guidance for the quarter a few weeks before.

Net income rose 84% to $18.4 million, or $1.08 per share, from $10 million, or 60 cents per share, in the year ago period. Analysts expected $1.07 after the company provided a guidance range of $1.04 to $1.10, up from its previous range of 74 cents to 83 cents.

Revenues surged 25% to $206.6 million from $165.9 million in the second quarter of 2007. Both segments contributed to growth in the quarter. In the Instrumentation Group, revenues grew 15% to $98.9 million from $85.7 million.

The Energy Products Group saw revenues increase 34% to $107.7 million from $80.2 million in the second quarter of 2007. Favorable currency exchange attributed to 12% of the revenue increase in the Energy Products Group and 4% of the growth in the Instrumentation Group.

The company is optimistic going forward as it sees solid global end markets, a good mix of products and favorable European currencies. On Sep 16, CIR announced it had received a multi-year contract from The Boeing Company to supply landing gear for the CH-47F Chinook advanced multimission helicopter. The terms of the contract were not disclosed.

Consensus Estimates Rise for the Third Quarter and the Full Year

Covering analysts continue to be bullish on CIRCOR as estimates for both the third quarter and the full year have been rising in the last 60 days. Third quarter estimates rose 10% to $1.00 from 90 cents per share. Full year estimates followed suit, increasing 12 cents to $3.77 from $3.65 per share.

Value Fundamentals

CIRCOR's forward P/E is 12.78. Its price-to-book is 1.90. The company has a solid one year return on equity (ROE) of 12.02%. As an added bonus, the company also pays a dividend with a current yield of 0.30%.