Here's why the A2 MILK FPO NZ share price skyrocketed again today

The A2 MILK FPO NZ (ASX:A2M) share price soared as much as 28.5% today, following Friday's 33% gain.

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The A2 MILK FPO NZ (ASX: A2M) ("a2 Milk") share price has continued its rapid ascent today.

After gaining more than 33% during Friday's session, a2 Milk's shares have risen another 15.5% today to trade at $1.60, after trading as much as 28.5% higher at $1.78 earlier in the session. Even at $1.60 the New Zealand-based dairy producer has still been given a market value north of $1 billion.

Source: Google Finance is showing a 54.1% rise for a2 Milk shares over the last three sessions
Source: Google Finance is showing a 54.1% rise for a2 Milk shares over the last three sessions

While strong global demand for high-quality infant formula products has generated enormous investor interest in the industry, a2 Milk's shares have risen particularly strongly over the last two sessions after the company increased its earnings guidance on Friday.

In its announcement to the ASX, the company said its 2016 financial year (FY16) operating performance would significantly exceed previous forecasts.

It is now guiding for revenue to be between $300 million and $315 million for the year, up from initial guidance of $285 million. It also expects earnings before interest, tax, depreciation and amortisation (EBITDA) to be between $33 million and $37 million, up from initial guidance of $22 million.

Despite the group's enormous success recently, there is still room for further expansion. As the company noted:

"The infant formula market in Australia is rapidly evolving and experiencing significant growth. The Company has recently increased the supply of a2 Platinum® infant formula to our customers however we continue to experience a level of out of stocks on shelf. The strong trading performance advised today provides further evidence of the increasing appeal of the a2 Platinum® brand in Australia and China and the growth potential in additional markets in the future".

Shares of Bellamy's Australia Ltd (ASX: BAL) have also risen 5% today to $13.67, having traded for just $1.65 at the beginning of the year.

Motley Fool contributor Ryan Newman owns shares of Bellamy's Australia. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. You can follow Ryan on Twitter @ASXvalueinvest. The Motley Fool Australia owns shares of Bellamy's Australia. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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