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What: Shares of oil services provider Superior Energy
So what: Though second-quarter profits of $0.83 per share came in slightly ahead of estimates, Superior reeled in its full-year EPS outlook about 20% to between $2.75 and $3.05. Analysts had expected earnings of $3.08 a share. CEO David Dunlap cited lower oil and gas prices affecting customer cash flows and demand for his company's services.
Now what: Even with the scaled-back guidance, this stock looks like a good value trading at a P/E of about 7.5 of 2012's expected earnings. A heavy debt burden from its acquisition of Complete Production Services may have investors thinking this is a value trap, though. With net income of $141.9 million on $1.24 billion in revenue last quarter in a period with difficult macroeconomic conditions, the company should be able to pay down its debt if it can control capital expenditures. Look for energy prices to guide shares in the near future. With such a low valuation, this could be a coiled spring if commodity prices rise significantly.
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Fool contributor Jeremy Bowman holds no positions in the companies in this article. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.