In the past, it was nearly a given that Zoltek (ZOLT) would miss analyst estimates while CEO Zsolt Rumy would keep saying “just wait, growth is coming”. Investors have been waiting for a long time for a return to the glory days. Perhaps those days are on the horizon… maybe. If the action in the stock over the past few months is any indication, that may be the case.
No, this wasn’t a great quarter from ZOLT, but the company did beat analyst estimates for the first time in a long time… albeit narrowly. The company posted a .05 loss vs the analyst estimate for a .06 loss on revenues of $32.9 million vs the estimate for $31.8 million.
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"During the past year, our largest customer in the wind energy business decided to close several wind turbine plants in Europe and to shift productive capacity to new locations in the United States and Asia. That led to a temporary decline in our sales to this customer for the fourth quarter and fiscal 2010 as a whole. Although our revenue declined, measured in tons rather than dollars, Zoltek’s shipments of carbon fibers actually increased by 9% in fiscal 2010 compared to fiscal 2009," Zsolt Rumy, Zoltek’s Chairman and Chief Executive Officer, said. "We also have come through an extremely difficult period in world markets in good financial condition – with a strong positive cash flow and with near zero long-term debt."
"Using Zoltek carbon fibers, Vestas, our biggest customer, took an early lead in the design and build of the world’s largest and most efficient wind turbines. Over the past two years, there has been a great deal of progress in China, India and other places as high-tech companies in those countries have moved in the same direction of larger and more efficient wind turbines. Wind energy is continuing to go global and entering a new phase of rapid growth. We believe that Zoltek’s Panex® carbon fibers are a key enabling technology for the cutting-edge segment of the market," Rumy said.
Shares of ZOLT are up about 15% today with heavy volume and breaking out of a large cup with handle base to a new multi year high. It doesn’t get any more bullish than that.