(APSG) Applied Signal Technology, Inc. – Aggressive Growth – Zacks Rank Buy

April 22nd, 2009

Applied Signal Technology, Inc. (APSG) shares have set and continue to pressure its 52-week high following great first-quarter results.

Company Description

Applied Signal Technology, Inc. designs, develops, and manufactures signal equipment to collect and process a wide range of telecommunication signals. This equipment is used for reconnaissance of foreign telecommunications predominantly by the United States Government and allied foreign governments, for certain industrial applications and for defense communications systems.

EPS up 125%

Applied Signal announced excellent first-quarter results on Feb 24 which included a 6.2% rise in revenues. The company generated $45.4 million in revenue, up from $42.7 million.

Through the solid rise in revenue, net income spiked 133% to $3.5 million, up from just $1.5 million 4 quarters ago. Earnings per share came in at 27 cents, up 125% from 12 cents in the same quarter last year.

Mr. Van Vleet said, “We remain focused on capturing organic growth opportunities across several categories of existing products and those in development, and on lowering our cost structure to reinforce our competitiveness on a broader range of programs.”

Bullish Analysts

Forecasts for Applied Signal’s earnings spiked following the aforementioned results. The consensus for fiscal-year 2009 is now 90 cents, up from 75 cents before the announcement. Estimates for 2010 are now averaging 99 cents, up from 87 cents.

If the estimates are met, year-over-year growth rates for 2009 and 2010 would be 44% and 10%, respectively.

Good History

Allied Signal has a solid earnings history with 3 surprises in the past 4 quarter. In the remaining quarter the company met expectations.

The Chart

After setting a new 52-week high, shares of APSG retraced sharply, but were quite responsive to support just above $19 per share. Take a look at the chart below.


Zacks Investment Research
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More on this topic (What's this?)
Applied Signal Technology is ignoring the recession (Blogging Stocks, 6/22/09)
Tuesday New Highs (Samurai Trader, 6/2/09)
Earnings Summary (Samurai Trader, 12/19/09)
Morgan Keegan Ups Price Target On Applied Signal Technology (APSG) (Benzinga, 10/22/10)
Read more on Applied Signal Technology at Wikinvest

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