Hurco stock, once a dog, posts new records

February 22, 2007

Shares of Hurco Companies Inc. are setting records and soaring well above their nearly worthless status of three years ago. The stock has shot up 28 percent, to $45, since the Indianapolis machine tool maker late last week reported a surge in sales and earnings for its first fiscal quarter ended Jan. 31.

The $5.4 million in earnings was a 78 percent increase from the same quarter a year earlier. And the $46.9 million in revenue was up 47 percent.

Hurco shares languished below $10 for a decade until a run-up that began in 2004. By early last year, the price had climbed to $37, then retreated only to resume its ascent.

Mike Coleman, an analyst who follows the company for Alabama-based Sterne Agee & Leach, said investors see Hurco’s expansion into Europe and Asia as balancing cyclical downturns in the U.S. market. “Hurco has put in place a strategy to grow globally,” Coleman said.

Sales are rising in Europe, and the company is pushing into China and India. Asia, India and Eastern Europe are gathering much of the manufacturing outsourced from the U.S., Coleman pointed out. In fact, Hurco’s stellar performance last quarter came in spite of a mild downturn in its North American market.

Hurco Chief Financial Officer John B. Oblazney said customers are responding to redesigned machines that offer Hurco engineering in the machines themselves as well as the computers that control them. The upshot is Hurco is building on its reputation for equipment that easy for low-skilled workers to use.

“We’re continuing down the same path of developing better products,” he said. “You’ll see more of the same each year.”

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