Monday, November 16, 2009

KHD Humboldt Wedag Smashes Estimates

KHD Humboldt Wedag (KHD) smashes the estimates for Q3 reporting $.25 compared to the $.05 estimate. Revenues were also much higher at $148M versus the $102M estimate.

The markets in Russia, Eastern Europe, Asia, and Africa appear to be moving forward finally. KHD is up 17% today, but the market cap is only $350M after this jump and still less then the cash balance of $407M. KHD remains one of the cheapest emerging market plays right now. Anybody following us should already own this stock, but any price close to $11 is still very attractive. Keep an eye on the gap in the charts and load up if it gets closed.


  • revenues of $148.2 million with a net income of $7.5 million, or $ 0.25 per share on a diluted basis, which included restructuring charges. This compares to revenues in the third quarter of 2008 of $193.6 million and net income for that period of $30.8 million, or $1.01 per share on a diluted basis. Our margins, excluding special charges, for the third quarter of 2009 were 17 percent as compared to 19 percent in the third quarter of 2008.
  • balance sheet remains strong. As of September 30, 2009, our cash and cash equivalents increased to $407.4 million (as compared to $356.8 at the end of the second quarter); working capital was $312.2 million; and shareholders' equity was $279.8 million (as compared to $257.9 million at the end of the second quarter). KHD's current ratio was 1.79 and its long-term debt-to-equity ratio was 0.04.
  • Order intake for the quarter ended September 30, 2009, was $113.0 million, an increase of 39 percent from 2008. Of this total, 31 percent came from Russia and Eastern Europe, 25 percent came from Asia, 18 percent came from the Middle East, 15 percent came from Europe and 11 percent came from Africa. Of the third quarter 2009 order intake, $76.8 million came from cement and $36.2 million from coal and minerals.

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