A simple wind shift can slow your sailboat to a crawl and require a change of direction to get moving again. Presented with a daunting headwind of impaired domestic industrial activity, and a prolonged re-balancing of rig counts among oil producers, one small-cap manufacturer is prepared to see its sales luff a bit longer.

Shares of Lufkin Industries (NASDAQ:LUFK) soared 12% Wednesday after third quarter earnings of $0.34 per share pulverized expectations of just $0.20. Continued deterioration of the company's order backlog and tightening profit margins, however, make it clear the company has not quite yet navigated out of harm's way. Lufkin's result marks an 80% decline in net earnings per share over the prior-year period. Revenue tumbled 40% to $117.7 million. Gross profit margin continued to slide from 28.6% of revenue a year ago, to just 21.2% in the third quarter.

Signaling sluggish sales volumes for the quarters ahead, Lufkin's consolidated backlog continued to mount a steady retreat from $413.9 million in 2008 to just $133.8 million ... a 68% crash in this forward-looking indicator of product demand. Manufacturers of mining equipment like Joy Global (NASDAQ:JOYG) and Bucyrus (NASDAQ:BUCY) have seen their backlogs shaken by near-term demand disruption, and like Lufkin are awaiting confirmation of sustainable demand levels within the "new normal."

CEO John Glick did not gloss over the challenges that remain: "We expect the next quarter to be challenging, with sluggish revenue growth and continued headwinds from low utilization rates and competitive prices that keep margins under pressure into the first half of 2010." Reflecting hope for continuation of recent strength in new bookings for oilfield equipment, Glick added: "While we are not predicting a vigorous rebound in the near term, we are seeing some initial signs that the worst of this market cycle may be behind us."

I agree that demand for oilfield equipment is bound for a rebound in 2010, and expect improving margins to eventually place the wind back in Lufkin's sails. I would like to offer a more resounding endorsement, but the company's latest filings lacked the detailed balance sheet data that this Fool requires to assess any equity in this economic environment. Investors have many quality vehicles to choose from to target a resurgence in oilfield services: from highfliers like Schlumberger (NYSE:SLB) or National Oilwell Varco (NYSE:NOV), to the Oil Service HOLDRs (AMEX:OIH) ETF. Given remaining uncertainty in the broader sector outlook, this Fool finds those large-cap options more attractive, but looks forward to loving Lufkin again when the time is right.