If you're searching for a U.S. sector that's shooting the lights out this earnings season, you need look no further than the oilfield services group. Indeed, the services companies have done so well that even a 35% year-over-year earnings improvement may not elicit much more than a sneer from market minions, as group leader Schlumberger (NYSE:SLB) found out last month.

Schlumberger's shares have given over 13% since the company's earnings were released a couple of weeks ago. Beyond even that big dog, though, were a couple of smaller energy service providers that were hit hard late last week following earnings reports in which they announced strong upward trends.

For instance, Oceaneering International (NYSE:OII), a Houston-based underwater engineering company, has dropped roughly 8% since rolling out 40% year-over-year earnings growth in the September-ended period. The company, which was founded four decades ago, provides all manner of sophisticated subsea engineering and assistance to the energy industry and to other customers, including the U.S. Navy. As such, it has been a beneficiary of the worldwide movement toward offshore production of a steadily higher portion of hydrocarbons.

And based upon increasing demand for and pricing of its services, the company is expected to earn about $3.20 per share this year, up about 40% from 2006. And its growth likely won't stop there: Management's guidance is for an EPS range of $3.50 to $3.80 for 2008.

Flotek (NYSE:FTK), a company that provides services and equipment to oil and gas producers, has been treated even more shabbily by the market. The company has seen its share price plummet by almost 38% since it was brazen enough to announce only 108% year-over-year EPS growth. Its real crime, of course, was to come in a nickel beneath EPS expectations.

Flotek, which is dwarfed by most of the large collection of Houston-based services companies, including Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI), operates through three segments. It provides an array of oilfield chemicals, downhole tools, and downhole production equipment. The fast-growing company has essentially doubled its revenues in both of the past two years.

Indeed, it's all about results versus expectations, and the services group is a tough taskmaster these days. Cameron International (NYSE:CAM), the third member of this Houston-based services triumvirate to report recently, has seen its shares essentially remain flat, despite having served up a 69% rise in third-quarter GAAP earnings. Indeed, it actually managed to beat the dart-throwers' expectations by the same nickel that Flotek fell short.

Cameron, which is considerably larger than either Oceaneering or Flotek, has been plying its trade since back in 1833, or before Col. Drake discovered oil in Pennsylvania. Today, the company produces an array of flow equipment products, along with systems and services to oil and gas producers worldwide.

And despite being long in the tooth for the group, Cameron, like most services companies, is very much in a growth mode. Management anticipates earnings to be nearly 56% higher this year than in 2006.

Sealing the pipe
As Flotek learned to its dismay -- with today's lofty expectations for the group -- even a doubling of earnings can result in a company's share price being taken to the woodshed if the doubling is less than the even greater growth the market had been anticipating.

Of course, the flip side of the coin is that, with crude prices continuing to rocket upward, I'm hard pressed to think of another sector with prospects as rosy as those of oilfield services. So this clearly is a group that Fools should watch when valuations appear to justify. Beyond that, my best advice is that, in many cases, the big profits have been made for now. So it clearly is best to maintain a long-term perspective on the services sector.

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Fool contributor David Lee Smith doesn't own a single share in any of the companies mentioned. He does welcome your comments, questions, and other communications. The Fool has a disclosure policy.