Compass Minerals International Inc.

Compass Minerals International Inc. (CMP - Snapshot Report) has just posted historic earnings. Earnings per share rose sharply on increased sales volume and the company is expanding into a growing market.

Company Description

Compass Minerals is the largest producer of rock, or highway deicing, salt in North America and the United Kingdom and operates the largest highway deicing salt mines in these regions.

The company is also the third largest producer of general trade salt in North America and the second largest in the United Kingdom, serving major retailers, agricultural cooperatives and food producers.

In addition, Compass is the largest producer of sulfate of potash in North America, which is used in the production of specialty fertilizers.

Historic Quarter

Compass Minerals announced the best quarterly performance in company history on Oct 28. Earnings per share more than quadrupled coming in at 87 cents, up from just 20 cents one year ago.

Earnings from salt operations jumped to $237 million, a 47% increase. Sulfate of potash earnings spiked more than 400% to $42 million.

Sales rose an impressive 70%, driven by both price and volume.

A 64% Surprise

The earnings announcement took Wall Street buy surprise, beating the consensus estimate of 53 cents by 64%. It was the third surprise in the past 4 quarters.

Estimates are climbing, following the announcement. The current year estimate is $4.55, more than double the $2.09 earned in 2007. Next year's consensus estimate is $7.53, a 65% increase of 2008 projections.

Expanding Subsidiaries

On Oct 30 Compass Minerals announced the formation of a new subsidiary, Pristiva Inc., which will focus on the salt water pool market, a $1.2 billion market in the U.S.

Salt water pools are easier on eyes, hair, and skin than standard chlorinated pools. They also require less maintenance and are "greener" than traditional pools. The market is booming as roughly 70% of new pools installed were salt water.

The Chart

The third-quarter earnings announcement acted as a catalyst to break shares of CMP out of its bearish trend. Take a look at the chart below.