The entire morning today I was reading about Actuant Corporation which has improved earnings and sales, beat expectations but I was baffled why the stock slumped today by almost 6%. I couldn’t find why; what is behind such behavior.

Well, here is why:

Actuant Sees Second Quarter Earnings Below Estimates; but Raises 2011 Guidance

Actuant Corp. said it expects second quarter earnings of $0.25 to $0.30 per share on revenue of $325.0 million to $335.0 million. The current consensus earnings estimate is $0.31 per share on revenue of $302.6 million for the quarter ending February 28, 2011. The company also said it now expects 2011 earnings of $1.45 to $1.60 per share on revenue of $1.38 billion to $1.43 billion. The company’s previous guidance was earnings of $1.30 to $1.45 per share on revenue of $1.225 billion to $1.275 billion and the current consensus earnings estimate is $1.42 per share on revenue of $1.28 billion for the year ending August 31, 2011.

Source: Trading Markets.com.

However, I believe, Actuant still has a great outlook so I am holding my position for now.

MILWAUKEE–(BUSINESS WIRE)–Actuant Corporation ATU today announced results for its first quarter ended November 30, 2010.

Highlights

* 71% year-over-year increase in diluted earnings per share from continuing operations (“EPS”) to $0.36 (excluding prior year special items – see attached reconciliation of earnings.)
* Core revenue growth (total sales less the impact of acquisitions, divestitures and foreign currency rate changes) of 14%. All four segments reported core sales growth, including the Energy segment at 4%.
* Year-over-year operating profit margin expansion of 230 basis points, excluding prior year restructuring costs.
* Completed the previously announced Mastervolt acquisition after quarter-end, repositioning the Electrical segment to higher growth and product technology.
* Increased full year guidance to reflect strong Q1 results, favorable trends, a lower effective tax rate and the Mastervolt acquisition.

Robert C. Arzbaecher, Chairman and CEO of Actuant commented, “Actuant had a strong start to the fiscal year with double digit core revenue growth, solid operating margin expansion and EPS above our expectations. In particular, we were pleased to have all four segments contributing to the core sales growth with Energy at 4%, and robust 22% core growth at both Engineered Solutions and Industrial. We completed the acquisition of Mastervolt, deploying $150 million of capital on this attractive growth platform which repositions our Electrical segment’s growth, margin and innovation trajectory. I want to thank our employees for their continued hard work and dedication in creating a solid start to the year.”

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Actuant Corporation will release its earnings tomorrow morning (12/16/2010). A conference call will be held at 10:00 AM CST. Watch/listen it here.

FBR Capital reiterates an ‘Outperform/Top Pick’ rating on Actuant raises PT to $29.

FBR analyst says, “We have a positive bias on Actuant shares heading into F1Q11 earnings on Dec 16 based on our expectation for upside earnings and positive outlook commentary. We see upside to FBR/consensus EPS estimate of $0.35/$0.34 primarily from better trends at Actuant’s highly profitable Enerpac (hydraulic tools, 28% of revenues), where our channel checks and proxy industrial indicators in Industrial Production and Grainger monthly sales suggest solid trends through the quarter…We are increasing our 2011/2012 EPS estimates to $1.55/$1.80 to reflect the Mastervolt acquisition and better underlying operating trends.”

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