(WLT) Walter Energy Incorporated – Fifth Consecutive Earnings Surprise

January 21st, 2010

Walter Energy (WLT) analysts are projecting impressive growth in 2010 as shares continue to climb.

Company Description

Walter Energy produces coking coal for the steel industry. Additionally, the company provides steam and industrial coal, metallurgical coke and methane gas.

Beat the Street

On Oct 20 Walter Energy reported third-quarter results that showed a 35% jump in coking cola sales, to 1.9 million tons. Net income came in at $24.4 million, or 45 cents per share.

Headed into the announcement, analysts were expecting just 27 cents, making it the fifth consecutive earnings surprise.

Comments from the CEO

Victor Patrick, Walter Energy’s CEO, said “We continue to see improving market conditions for our product and we are on track to achieve sales of approximately 3.5 million tons in the second half.”

Estimates Surge

The Zacks Consensus Estimate for full-year 2009 is split and now projects EPS of $2.64. However, 9 upward revisions have been submitted for 2010, bringing the consensus to $6.75, from $6.40 in the past 3 months. This would be a growth rate of 155%.

The Chart

Shares of WLT are trading at just under 11 times forward earnings. Also, despite some volatility, the overall trend for Walter Energy is up. Take a look at the chart below.

A chart for Walter Energy

Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service

Zacks Investment Research

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Read more on Energy, Walter Industries at Wikinvest

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