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10 Stocks With Explosive Earnings Growth: No. 6 Alliant Techsystems (ATK)

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July 6, 2009 5:08 PM EDT

In the current difficult macroeconomic environment it is hard to find companies that are earning a meaningful profit, let alone growing earnings. But these 10 stocks have been rewarding investors with explosive earnings growth and stock performance to boot. You can track the entire series here.

Number 6: Alliant Techsystems (NYSE: ATK)

ATK is a premier aerospace and defense company created from the 1990 spin-off of Honeywell Inc.'s defense businesses to its stockholders.

ATK has three segments: ATK Armament Systems, ATK Mission Systems, and ATK Space Systems. ATK Armament Systems develops and produces military ammunition and gun systems; commercial products; tactical accessories and equipment, and propellant and energetics. It also operates the U.S. Army ammunition plants in Independence, Missouri and Radford, Virginia. ATK Mission Systems operates in two areas: Weapon Systems and Aerospace Systems. ATK Space Systems operates in two primary businesses: Launch Systems and Spacecraft Systems. The Launch Systems division produces solid rocket motor systems for human and cargo launch vehicles, conventional and strategic missiles, and missile defense interceptors, as well as ordnance decoys and illuminating flares. The Spacecraft Systems division produces small satellites and satellite subsystems and components for large satellites, as well as a variety of other spacecraft.

For Fiscal 2009, ATK's sales to the U.S. govenment represented 76% of total company sales and sales to commercial and foreign customers represented the remaining 24%.

ATK's sales in FY09 increased 10 percent to $4.6 billion. The company sees FY10 sales rising to $4.73 - $4.80 billion.

Earnings Growth:
Alliant Techsystems' diluted earnings per share for fiscal 2009 increased 23% to $7.75 per share from $6.32 in the prior year. In the fourth quarter of 2009, fully diluted EPS (ex-impairment charge) increased 33% to $2.28, compared to $1.72 in the prior-year quarter.

Earnings Prospects:
With its fourth quarter results in May, ATK raised its FY10 EPS guidance to a range of $8.05 - $8.25, up from its previous expectations of $7.40 - $7.60. This represents growth of 3.8% to 6.5%. NOTE: In FY10, the company expects this accounting change to result in a $0.35 impact per share, which is reflected in its current guidance range.

With a total backlog that has increased nearly 8% to approximately $7.0 billion as of March 31, 2009 and the exploding size of the U.S. government, ATK's earnings prospects look strong for years to come

Stock Performance:
Shares of ATK are down 7% YTD, versus a 0.5% drop in the S&P 500. Over the last year, ATK is down 22%, versus a 29% drop in the S&P 500. Over the last 5 years, ATK is up 27.5%.