Fuel Systems Solutions, Inc. (FSYS) delivered a solid third quarter and saw analysts boost estimates. Earnings forecasts of $2.11 per share for the 2009 year are above the two months-ago projections of $1.74.

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.

Recent Events

The company recently announced that its Italian operating subsidiary, MTM S.r.L., signed an agreement to acquire Distribuidora Shopping S.A. (DS), a privately held manufacturer of components and systems for the compressed natural gas (CNG) vehicle market. Fuel Systems noted that the transaction is expected to close in January 2009.

Solid Results in the Third Quarter

In early November, the company posted third-quarter earnings of 75 cents per share, soaring past analyst estimates of 23 cents. Revenue was up 62% from last year to $106 million.

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%.

Higher Estimates

Earnings forecasts of $2.11 per share for the 2009 year are above the two months-ago projections of $1.74.

Favorable Industry Comparisons

Fuel Systems net profit margin of 7% tops the industry average of 1%. The company’s return on equity (ROE) of 21% nearly doubles the industry average of 11%. Fuel Systems also carries very little debt as evidenced by its debt/capital multiple of 4%.

Content Courtesy: Zacks Investment Research

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