Why Shares of Caesarstone Ltd. Are Soaring Today
Image Source: Caesarstone Ltd.
What: Shares of engineered quartz surface manufacturer Caesarstone Ltd. (NASDAQ: CSTE) jumped on Wednesday following the company's second-quarter report. Caesarstone beat analyst estimates on all fronts, driving the stock up 17% by noon EDT.
So what: Caesarstone reported second-quarter revenue of $142.3 million, up 11.6% year over year and about $3 million higher than analysts were expecting. Currency had a negative impact, with revenue growing by 13.4% on a constant currency basis. Caesarstone pointed to strong double-digit sales increases in Canada and Australia as the main drivers of the company's revenue growth. U.S. sales grew at a slower 5% rate.
Non-GAAP EPS came in at $0.73, up from $0.65 during the prior-year period and $0.08 higher than analysts were expecting. Gross margin rose 80 basis points year over year to 42.1%, driven by a favorable product mix.
Caesarstone also gave an update on its search for a new CEO. Previous CEO Yos Shiran resigned in May, staying on during the search. Caesarstone now expects to appoint a new CEO by the end of September, with Shiran's last day in office set for Aug. 21.
Now what: Caesarstone posted strong results for the second quarter, and it reiterated its full-year guidance as well. The company expects to produce revenue between $550 million and $565 million and adjusted EBITDA between $138 million and $145 million.
Shares of Caesarstone have been volatile since crashing late last year. With the stock rising on a strong earnings report, investors now have good reason to be more confident in the company.
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Timothy Green has no position in any stocks mentioned. The Motley Fool recommends Caesarstone. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.