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What: Shares of oilfield services specialist Lufkin Industries
So what: Lufkin's disappointing second-quarter -- adjusted EPS of $0.66 versus the consensus of $0.82 -- coupled with a gloomy full-year outlook reinforces concerns over the company's profitability going forward. Specifically, Lufkin continues to see manufacturing and field service disruptions as a result of escalating labor unrest in Argentina, forcing several Wall Street analysts to downgrade the stock on all the uncertainty.
Now what: Management now sees full-year adjusted EPS of $3.00-$3.20, down from its previous view of $3.75-$4.05. "Argentina will continue to be an area of risk so long as the labor unrest and political uncertainty loom around the oil and gas industry in that country," cautioned CEO John "Jay" Glick. Of course, when you couple the short-term nature of the labor strikes with the stock's single-digit forward P/E, Lufkin might be an attractive value opportunity for patient Fools.
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