Thus far this earnings season, companies in the oilfield service sector have reported mostly strong results -- only to tack on caveats about an uncertain future. But Houston-based NATCO
For the quarter, the company reported $5.6 million in net income, or $0.28 per share, down from $12.1 million, or $0.63 a share, year over year. Its most recent quarter did include $2.6 million in legal and compliance review expenses.
NATCO makes a variety of wellhead process systems used in the production of oil and natural gas, including off-the-shelf separators, heaters, and dehydration equipment, along with a variety of made-to-order systems, and gas processing facilities for removing carbon dioxide from hydrocarbon streams. It also designs and manufacturers a host of control panels and systems for a variety of industries.
According to CEO John U. Clarke, NATCO's most recently completed quarter was hit by the effects of the now-infamous Gustav and Ike hurricane duo in the Gulf of Mexico, along with steel-price increases and a touch of revenue-recognition timing. But despite its somewhat uninspiring recent results, Clarke noted that NATCO's bookings during the quarter were 57% higher year over year, and that the "work will carry us well into 2009 and 2010."
NATCO's results have been materially different from the likes of Schlumberger
My suggested approach to NATCO, whose shares are down 70% from their 52-week high, is to simply keep tabs on the company for now, but to become more interested in the event of further booking increases and earnings expansions. This, frankly, is a little company without real across-the-board competition. Especially given its major share-price reduction, it could become worth your time in the face of an energy-price reversal.
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