Shares in industrial goods Small-Cap Star Trex Company (TREX) skyrocketed on Monday after the company reported Q4 earnings that had the maker of wood/plastic composite products swinging to profit. The stock shot up over 25 percent on very heavy volume, with shares hovering just under $85 apiece and hitting a 52-week high.
Trex reported earnings of $0.23 per share, swinging to a positive after losing $0.91 a share in the previous quarter. It was a major beat, with analyst expectations coming it at just $0.06 a share. Driving the gains was a 38 percent year-over-year increase in net sales to $63.8 million from $46.2 million in Q4 of 2012.
"We brought 2013 to a very strong finish," said Chairman, President and CEO Ronald W. Kaplan. "Expanded distribution and dealer demand across the country contributed significantly to sales and are helping us advance a key initiative – increasing market share. Our best-in-class high-performance product platform, coupled with our recently revised pricing strategy, is being well received in the marketplace. Our robust sales increase fell to the bottom line, producing an impressive $6.0 million improvement over underlying net income in the 2012 quarter.”
The strong earnings report also made waves with the announcement that the Board of Directors had approved a 2-for-1 stock split with the additional shares being distributed in the form of a stock dividend on May 7 to all shareholders of record as of market close on April 7.
Trex currently finds itself in a strong uptrend, with the company’s stock chart showing sharply rising resistance and support levels. The stock had been hovering around the support level in this channel prior to today’s earnings report and subsequent spike.
On the whole, Trex is up over 85 percent over the last year, making it one of the better performers in the Small-Cap Stars. And a closer look at the company’s Equities.com EVA Report shows growth over time, with significant improvement from 2011 to 2012 in revenue, gross profit, and net margin.