This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Trex Shares Surge on Surprise Profit

NEW YORK ( TheStreet) -- Shares of Trex Co. (TREX - Get Report) jumped on heavy volume Monday after the maker of wood-alternative decking products posted a surprise profit for its fourth quarter.

The Winchester, Va.-based company reported adjusted earnings of $3.6 million, or 23 cents a share, for the three months ended Dec. 31, on sales of $75.3 million. The average estimate of analysts polled by Thomson Reuters was for a loss of 52 cents a share on sales of $60.7 million. Including charges, Trex lost $500,000, or 3 cents a share, in the latest quarter.



The stock rose $2.91, or 11%, to $29.58 on volume of around 950,000, more than seven times its three-month trailing daily average of 120,000. The shares have gained more than 30% in the past year, hitting its previous 52-week high of $27.11 on Feb. 18. Earlier in Monday's session, the stock reached a new peak of $30.90, its first move above $30 since May 2006.

"Sales broke our fourth quarter record as both distributors and dealers responded enthusiastically to our products, sales programs and pricing strategy," said Ronald Kaplan, the company's chairman and CEO, in a statement. "Our Trex Transcend collection contributed strongly to sales, and is now widely recognized as the number-one brand of high-performance decking and railing."

Trex also offered up an in-line sales outlook of $70 million for its current fiscal first quarter ending in March.

Wall Street was bullish on Trex ahead of the report with six of the eight analysts covering the shares at strong buy and the median 12-month price target sitting at $35.

Canaccord Genuity reiterated a hold rating and $28 price target on the stock following the report, mainly because of valuation concerns as it was very positive about the company's performance and lifted its earnings estimate for fiscal 2011 to $1.40 a share from $1.00 a share to reflect improving gross margins and a lower tax rate.

"With Transcend start-up costs now behind the company, we see GMs gross margins expanding to an estimated 32.9% in 2011," the firm said. "We note that Trex talked about achieving mid-30% GMs this year, so our estimate may prove somewhat conservative if management can hit this target."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
TREX $52.42 3.40%
AAPL $126.35 2.50%
GOOG $551.83 0.64%
FB $83.18 -0.14%
TSLA $190.58 3.00%

Markets

DOW 17,976.31 +263.65 1.49%
S&P 500 2,086.88 +25.86 1.25%
NASDAQ 4,947.0330 +55.8140 1.14%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs