Fuel Systems Solutions: All Systems Go For Growth Next Year

| About: Fuel Systems (FSYS)

Fuel Systems Solutions, Inc. (NASDAQ:FSYS) continues to increase output and grow its earnings as demand in response to strong demand for alternative energy technologies. Analysts are projecting 13% earnings growth in the next-year period.

Company Description

Fuel Systems Solutions, Inc. designs and manufactures supplies for alternative fuel components for both transportation and industrial uses. The company's products and systems allow regular cars to operate using either propane or natural gas. Fuel Systems was founded in 1958, carries a market cap. of $588.64 million and is headquartered in Santa Ana, California.

Fuel System's impressed the Street on Nov 7 when the company reported very impressive third-quarter results. Revenue was up 62% from last year to $106 million. Net income came in at $11.9 million, a big jump from last year's loss of $395,000. This produced earnings of 75 cents per share, blowing past analyst estimates of 23 cents.

Consistent Earnings

This was the fourth time in the last four quarters that the company has surprised and beaten analyst estimates, having done so by an average of 30 cents, or 147%.

Financial Positioning

The company also said that it now has cash and cash equivalents totaling $34.4 million and working capital of $88.1 million, adding that this will enable it to grow both organically and through acquisition.

Guidance and Estimates

After the solid quarterly results, Fuel Systems raised its 2008 revenue guidance to $385 million from the previous $350 million. Gross margin is expected to 29%.

The analyst community is bullish on the company as well, with the next-year estimate pegged at $2.04, a 13% earnings growth projection.

The Chart

Shares of FSYS have been on an impressive rally for the last month, jumping from just above $22 to a recent high at $40, where some short-term resistance has developed. Take a look at the chart below.

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