When I say "driller," what's the first company that comes to mind? Halliburton
Yes, Layne drills for oil and gas, and one of its divisions is actually a sharp little E&P business. But Layne also provides drilling services for the water, minerals, and construction industries. As opposed to, say, Grey Wolf
In revenue terms, Layne's water infrastructure business -- which, I should note, extends far beyond drilling -- is by far the biggest line of business. In the past quarter, revenue leaped more than 22% to nearly $200 million. The mineral exploration and energy segments kicked in around $60 million and $12 million in sales, respectively. Each segment grew its top line by a searing 28%.
Margins are another matter entirely. Those latter two businesses, in today's environment at least, are far more profitable. On an absolute basis, pre-tax income from mineral exploration has actually eclipsed the water business on both a quarterly and six-month basis. Layne Energy, while small, has the best margins of all.
Of course, those commodity-powered profits will cool off at some point, and I expect the water business will keep chugging along. If the commodity-driven volatility of service stocks like Flotek Industries
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