Flotek Earnings: An Early Look

Earnings season is winding down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Flotek (NYSE: FTK  ) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed, knee-jerk reaction to news that turns out to be exactly the wrong move.

Flotek supplies chemicals and drilling equipment to the oil and gas industry, and with all the activity going on in energy these days, that's been a lucrative area for Flotek to make money in. Let's take an early look at what's been happening with Flotek over the past quarter and what we're likely to see in its quarterly report on Wednesday.

Stats on Flotek

 

 

Analyst EPS Estimate

$0.17

Change From Year-Ago EPS

325%

Revenue Estimate

$77.9 million

Change From Year-Ago Revenue

4%

Earnings Beats in Past 4 Quarters

1

Source: Yahoo! Finance.

Will Flotek drill up more profits this quarter?
Analysts have kept their estimates on Flotek rock-steady over the past few months, with no changes to the just-ended quarter or full-year 2013 projections. The stock, though, has done quite well, rising almost 20% since early December.

Flotek has three key segments. First, it makes specialty chemicals that help boost production from oil and gas wells. Second, its drilling products divisions makes and repairs drilling tools, serving not only the energy industry but also mining and water companies. And finally, Flotek makes pumps and related system components. Combined, these areas make Flotek a useful resource for a wide variety of customers.

In February, Flotek hit a milestone, as it terminated its share lending agreement with JPMorgan (NYSE: JPM  ) . With Flotek having been able to repurchase convertible notes at the end of last year, the move frees up the final 2.4 million shares held by JPMorgan under the agreement, and as CEO John Chisholm noted, Flotek's financial statements should be more transparent for investors as a result.

So far this earnings season, most larger oil services companies have done reasonably well with their earnings, albeit amid modest expectations. Schlumberger (NYSE: SLB  ) and Halliburton (NYSE: HAL  ) both succeeded in posting earnings beats in their respective quarterly reports, with fairly strong revenue growth as well. Although Flotek is much smaller, those big-company trends still bode well for the company.

In its quarterly report, watch for Flotek to comment on capital expenditures among industry players. If oil and gas companies expand their capex budgets, then Flotek could be a big beneficiary going forward.

Domestic oil and gas service companies have taken a hit in the recent past due to a slowdown in the natural gas drilling boom of the last couple of years. As this market looks to rebound, investors would be wise to consider Halliburton, one of the top companies in the business and one of those most in tune with the domestic market. To access The Motley Fool's new premium research report on this industry stalwart, simply click here now and learn everything you need to know about how Halliburton is positioning itself both at home and abroad.

Click here to add Flotek to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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