Shares of Oil States International Inc. fell Monday after an analyst lowered his full-year profit estimate for the oil services company on expectations of reduced drilling and lower pricing.
Oil States shares fell $1.27, or 6 percent, to $19.99 in morning trading.
Last week the company posted earnings that exceeded consensus estimates, but declined from the prior-year quarter due mainly to significant declines in North American drilling and completion activity.
The company said its earnings fell to $56.1 million, or $1.13 per share, compared with $65.5 million, or $1.29 per share, in the prior year period. Revenue rose to $667.1 million from $601.2 million.
Analysts surveyed by Thomson Reuters expected a profit of $1.03 on revenue of $671.2 million.
Jefferies & Co. analyst Stephen Gengaro said he expects the company to face "stiff headwinds" for the rest of the year. Gengaro said Oil States' well services segment will likely see weakened results as rental tools and drilling services face lower utilization and reduced pricing. Also, the second quarter will be pressured by the normal seasonal slowdown in Canadian activity. Reduced volumes and lower pricing will weaken the tubular services business for the rest of 2009, he added. The most resilient business segment is Oil States' offshore products business, Gengaro said, citing its longer-term projects.
Gengaro lowered his 2009 profit prediction for Oil States to $2.30 per share from an earlier outlook of $2.45 per share. For 2010, he expects $2 earnings per share, down from $2.65 per share forecast previously.
He maintained a "Buy" rating and raised his price target to $30, up from an earlier forecast of $21.
source yahoo
Oil States shares fell $1.27, or 6 percent, to $19.99 in morning trading.
Last week the company posted earnings that exceeded consensus estimates, but declined from the prior-year quarter due mainly to significant declines in North American drilling and completion activity.
The company said its earnings fell to $56.1 million, or $1.13 per share, compared with $65.5 million, or $1.29 per share, in the prior year period. Revenue rose to $667.1 million from $601.2 million.
Analysts surveyed by Thomson Reuters expected a profit of $1.03 on revenue of $671.2 million.
Jefferies & Co. analyst Stephen Gengaro said he expects the company to face "stiff headwinds" for the rest of the year. Gengaro said Oil States' well services segment will likely see weakened results as rental tools and drilling services face lower utilization and reduced pricing. Also, the second quarter will be pressured by the normal seasonal slowdown in Canadian activity. Reduced volumes and lower pricing will weaken the tubular services business for the rest of 2009, he added. The most resilient business segment is Oil States' offshore products business, Gengaro said, citing its longer-term projects.
Gengaro lowered his 2009 profit prediction for Oil States to $2.30 per share from an earlier outlook of $2.45 per share. For 2010, he expects $2 earnings per share, down from $2.65 per share forecast previously.
He maintained a "Buy" rating and raised his price target to $30, up from an earlier forecast of $21.
source yahoo
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