The good news is that BJ Services
The result in the most recent quarter was an earnings decline from the prior year and a shortfall vs. expectations. For the quarter, the company's net income was $172.2 million, down nearly 17% from the same quarter a year ago. The diluted per-share line was $0.58, vs. $0.70 in the same quarter last year. Apparently, analysts following the company had been looking for per-share earnings to come in about a penny higher.
More than 80% of BJ Service's revenues result from its pressure pumping operations, and fully 60% of pressure pumping revenues are generated in the U.S. and Mexico. Throwing in Canada gets North America's cut of pressure pumping revenues up to about 73%.
The difficulty from BJ Services' perspective is that pressure pumping pricing has retreated in the U.S. and Canada. And looking ahead, projections of flat drilling activity at home don't bode well for a reversal of that trend in the U.S., while the company's Canadian operations may benefit from the emergence of winter drilling season. All in all, management expects the current quarter to come in at about $0.55 to $0.57, a meaningful dip from the comparable $0.64.
This is, I suppose, a laboratory example of the steady movement of energy exploration and production from the U.S. to other, more prolific venues. I'd include Brazil, the Middle East, and the former Soviet states here.
It's also indicative of the logic behind Halliburton's
As to BJ specifically, I'm inclined to take a pass until its prospects brighten. This well-managed company will have its day, but that day is too far out for my money.
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