Sales grew about 14%, but the bulk of it was defense, with Housewares slowing to 6%. Recall that Housewares were very strong last quarter, while Defense was very weak (it's lumpy). EPS grew about 12%, though it appears that used equipment sales in the diapers boosted the earnings. If I look at YTD growth in the segments, here is how it looks compared to 5.9% overall YTD growth:
YTD EPS growth off of this 5.9% top-line is 16%.
This sounds decent to me. I was a bit alarmed at the clearly unsustainable Housewares growth reported last quarter and the not-so-clearly unsustainable weakness in defense, so it's good to see the normalization.
Compared to 2008, EPS are 78% higher, while sales are 19% higher. We have been looking for minimal margin expansion this year due to a reversion of freight and material costs, which were very weak in 2009.
It seems that NPK is capable of growing EPS this year slightly faster than sales. In 2009, EPS were 9.13, and it seems reasonable to continue to expect EPS of about $10 in 2010. This will require earning about $6 in H2 compared to $5.60 last year (just 7% growth).
A wildcard on NPK is that if the tax-law on dividends is going to change, they could declare their extra dividend in December rather than March. I am not sure if they would be able to do this or not, but they might even issue some debt to recapitalize and pay an even larger dividend (any tax guys know if this is even possible???).
At 10PE, NPK stock looks to be a reasonable name for conservative growth.