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Why Vectrus Inc Stock Surged Today

What happened

Shares of Vectrus Inc (NYSE: VEC) were climbing today after the government services provider reported strong first-quarter results.

As of 12:19 p.m. EDT, the stock had gained 12%.

So what  

Vectrus said revenue declined 6.6% to $290.1 million because of lower activity in its Afghanistan programs; however, that figure easily beat estimates of $243 million.

Image source: Vectrus.

On the bottom line, meanwhile, earnings per share fell by a penny to $0.60, although net income increased slightly as EPS fell thanks to an increase in shares outstanding. That result also breezed past analyst estimates at $0.50. 

CEO Chuck Prow said the company was "off to a fast start in 2017, with a much improved operational and financial outlook." He noted the company's Kuwait Base Operations contract was extended by a year, and that the company won all of its recomplete contracts scheduled to be awarded in 2017.

Now what

Looking ahead, Vectrus lifted its full-year guidance on the strength of the new contracts and contract extensions. The company now expects revenue of $990 million to $1.09 billion, up from $910 million to $1.01 billion, and earnings per share of $1.68 to $2.00, up from $1.53 to $1.83.

Both of those figures were well ahead of the analyst consensus at $908 million in revenue and earnings per share of $1.55. Considering the strong quarterly results, which easily beat estimates, and the increase in guidance, the jump on Vectrus shares seems well-deserved.

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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.