That oil services squeeze I've been talking about? It looks like Acergy
As an offshore engineering and construction contractor, primarily operating in deep water and harsh environments like the North Sea, Acergy serves the big boys like Petrobras
The good news that Acergy reported along with its quarterly results yesterday was that the firm's suppliers of equipment and subcontracting services are beginning to more quickly realign their prices to the new environment. That should keep margins from falling off a cliff.
Turning to the numbers, they were just OK. Earnings per share matched last year's results, but that owes to a favorable comparison on discontinued operations. Back those out, and you're looking at a decline in EPS of over 20% -- and that's with 4% fewer shares outstanding.
The glaring issue here is West Africa, which provided nearly half of revenue in 2008. Acergy did pull in a decent contract for an Angolan LNG project backed by a consortium including Chevron
Despite its suboptimal governance, I retain my affinity for Acergy. Considering the client base (less than 10% of business is tied to smaller independents) and these massive firms' seemingly unshakeable commitment to deepwater development, Acergy looks very well suited to survive these tough times in the oil patch.