Libbey Inc.
(
LBY
) has been showing considerable strength following its outstanding
second quarter 2012 results, which included an earnings surprise of
108.5%. Shares of this glass tableware manufacturer hit a new
52-week high on September 18, shortly after announcing some cost
reduction measures. With attractive valuation metrics, including a
price-to-sales (P/S) ratio as low as 0.4, this Zacks #1 Rank
(Strong Buy) stock is a compelling value pick.
Solid Second Quarter
On July 26, Libbey reported adjusted earnings of 98 cents per share
for the second-quarter, which crushed the Zacks Consensus Estimate
of 47 cents. The company has now beaten the Zacks Consensus
Estimate in three out of the last four quarters with an average
surprise of nearly 70%. Earnings also jumped 96% from the
prior-year quarter driven by Libbey's productivity improvement and
cost-control initiatives.
Revenues declined 2.2% year over year to $209.2 million due to
foreign exchange headwinds. Excluding the currency headwinds,
revenues increased 1.4% driven by a strong performance in the Glass
Operations segment, which grew 2% in constant currency terms thanks
to solid sales in China, the U.S. and Canada.
Adjusted operating income increased 19.4% to $29.0 million in the
quarter as sluggish revenues were offset by productivity
improvement and cost control. Glass Operations earnings improved
27.8% in the quarter.
Rising Earnings Estimates
The Zacks Consensus Estimate for 2012 has increased 32.5% over the
last 60 days to $1.55 per share, implying year-over-year growth of
25.3%. For 2013, the Zacks Consensus Estimate rose by 5.1% over the
same timeframe to $1.64 per share, reflecting year-over-year growth
of 5.8%.
Plenty of Value
Libbey has performed reasonably well so far this year, generating a
healthy year-to-date return of roughly 20.4%.
Libbey has enough potential to attract investors seeking value. In
addition to having a low P/S, the stock has an attractive forward
P/E ratio of 10.2. (A P/S ratio lower than 1.0 and a P/E below 15.0
generally indicate value.)
The company also has other solid fundamentals, such as a superb
return on equity (ROE) of 100.2%. The S&P 500, in comparison,
has an average ROE of 14.4%.
Based in Toledo, Ohio, Libbey is one of the largest manufacturers
of glass tableware in the U.S. and Canada. It sells its products to
foodservice, retail, industrial and premium customers in more than
100 countries. Libbey has a market cap of roughly $322 million.
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LIBBEY INC (LBY): Free Stock Analysis Report
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