I suppose that those of us with a bent for energy tend to gravitate to portions of the industry that we find particularly intriguing. In my case, I'm attracted to seismic, a small but important portion of the sector.
And within seismic, I find one of the more compelling participants to be Paris-based CGGVeritas (NYSE: CGV), which, despite being slapped around by the market like essentially all its energy brethren, has just come forth with both a solid quarter and an optimistic look at what lies ahead. For the quarter, the company generated net income of $161.7 million, up 73% from $93.5 million a year ago. On a per-share basis, that yielded $1.14, compared to $0.70 in the third quarter of 2007.
As many Fools are aware by now, I'm always attentive to the comments at earnings time from Andrew Gould, the CEO of Schlumberger (NYSE: SLB), another French-born company that also operates a substantial seismic unit. For that reason -- along with the current plight of the energy group -- I found significance in the comments of Veritas CEO Robert Brunck when he talked about the importance of "high-end differentiated seismic" in enhancing the "value and productivity" for his company's exploration and production clients.
Veritas isn't alone in producing quality earnings from seismic operations. Both Geokinetics (NYSE: GOK) and Dawson Geophysical (Nasdaq: DWSN), a pair of Texas-based companies, recently chalked up record results. And in CGG's case, it appears that, with its approximately $1.9 billion backlog, the company may still be growing: On Monday, it announced that it will offer one of its shares for each seven shares of Wavefield Inseis, a Norwegian pure-play seismic company.
But even on top of the solid showing thus far in 2008, Brunck and his minions believe that, based in part on upcoming lease rounds, stronger results lie ahead for the company. Along with its earnings growth, management further expects the ratio of net debt to equity will soon be trimmed to 35%, versus 46% at the end of 2007.
So I'd suggest that my Foolish friends with a bent for energy investments add a third sound French play to Schlumberger and Total SA (NYSE: TOT). After all, given its performance and its prospects, it's awfully difficult to justify CGG's 40% price slide since May.
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