Today, before the market opened in New York, Middleby (MIDD) reported second quarter earnings of $1.63 a share. That was 7 cents a share above Wall Street projections and 20.&% higher than the $1.35 a share reported for the second quarter of 2017. Revenue climbed 15.3% year over year to $668.1 million, well above analyst consensus act $$645.9 million.
On the news shares closed up 13.66% today to $120.18.
This quarter is a huge turnaround from the earnings and revenue miss reported in the first quarter on May 9. Then the company missed by 18 cents a share on earnings of $1.20 and on revenue of $584.9 million against the Wall Street consensus of $598.1 million.
Those results raised fears that Middleby’s growth strategy of buying smaller companies in the commercial restaurant equipment space and then managing them to higher margins had run out of gas–even though the revenue disappointment still showed 10.3% year over year revenue growth.
The big bounce today is an indication that investors and traders think growth is back and see Middleby’s current price of $120.18 a share as a bargain–even after today’s move. The stock traded at $131.63 back on May 8 before the negative surprise in the May 9 earnings report.
Middleby is a member of my long-term 50 Stocks Portfolio. The shares are up 148.98% since I added them to that portfolio on May 3, 2013.