Shares of Servotronics, Inc. (AMEX: SVT) climbed more than 20% in today�s trading. The small cap stock closed 19.54% higher at $10.04, after reaching a high of $10.94 in trading. Volume was up from daily average of 2,000 to 43,435. Elma, New York-based Servotronics is a designer, manufacturer and marketer of advanced technology products. The company is organized in two groups, the ATG, which serves commercial, and government applications in aircraft, jet engines and missiles, and the CPG, which designs and manufactures cutlery, bayonets, machetes and combat, survival, agricultural and other edged products for commercial and government applications.
Servotronics today announced its first-quarter results, reporting first-quarter net income of $622,000 on revenue of $7.88 million. In the same period, last year, the company reported net income of $125,000 on revenue of $7.54 million. Following the fivefold increase in net income, the small-cap stock surged in today�s trading. The company said that the increase in net income was mainly due to cost containment activities.
The company previously reported that some of the major manufacturers of commercial aircraft have initiated plans to raise production to support projected increases in aircraft deliveries over the next two years. As a result, aircraft component suppliers have been asked to raise their manufacturing capabilities to support aircraft production. The company expects government procurements to be volatile.
Servotronics� first-quarter results are definitely encouraging. However, it remains to be seen whether it can be sustained as a lot depends on factors beyond company�s control. The small cap stock has a 52-week range of $5.50-$11.30, which shows that there has a lot of price fluctuation in the past one year. The stock has a beta of 1.17, which implies that it is volatile. Currently, the small cap stock is trading above its 50-day and 200-day moving averages.
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