SPX Corporation (SPW) boosted its earnings guidance for the second time on strong growth in the second quarter. The company recently posted second-quarter earnings per share of $1.70, exceeding the consensus estimate by 9% and outpacing year-prior total.

Company Description

SPX provides creative solutions that enable its customers to deliver things like the parts and processes necessary to help manufacture food, beverages, pharmaceuticals and other critical products.

The company also provides solutions that help generate the power that heats homes, cools sports venues, transports products and more, as well as solutions that help tap into new energy sources like enabling power generation plants to run on alternate energy sources.

SPX’s businesses market and manufacture products and services for global infrastructure, process equipment and diagnostics tools. The company’s businesses segments are flow technology, test and measurement, thermal equipment and services, and industrial products and services.

Recent Events

The company recently announced that one of its divisions acquired AUTOBOSS Tech, Inc., a China-based manufacturer of diagnostic tools and equipment serving China’s fast growing vehicle maintenance and repair market.

“This investment further underscores our commitment to accelerate growth and expand our business in strategic markets, China in particular,” said David J. Wilson, President of SPX Service Solutions, Asia Pacific. “The leaders of AUTOBOSS have developed an outstanding brand that we will leverage to expand our aftermarket business in China and across the region. We are pleased the leadership team has committed to continue working with us.”

Wilson added that AUTOBOSS broadens SPX’s product portfolio, adds extensive channel coverage and gives the global engineering team a great opportunity to accelerate the development of SPX’s next generation diagnostics tools

Income

SPX declared a quarterly dividend of 25 cents per share payable on October 2, 2008, to shareholders of record on September 15, 2008. The company’s yield is 1%, which is higher than the industry average.

Growth

The company posted second-quarter results in late July. Earnings per share of $1.70 exceeded the consensus estimate by 9% and was ahead of the year-prior total. The company’s power and process equipment end markets contributed significantly to the earnings growth.

SPX has a solid history of outperforming analyst earnings estimates. During the past five consecutive quarters, earnings per share have eclipsed the consensus forecast by an average of 9%.

Revenues increased 28.8% to $1.56 billion from $1.21 billion in the year-ago quarter

The company commented that based on these results and current trends, it is raising its earnings per share guidance range to $6.40 to $6.60 from the previous range of $6.20 to $6.40. This is the second time SPX raised its guidance range this year, reflecting approximately 34% over last year.

Wall Street is in line, projecting $6.59 for 2008. Two months ago, analysts were calling for $6.41.

Content Courtesy: Zacks Investment Research

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