Team (TISI +5.64%) will release its quarterly report on Tuesday, and investors have steadily gotten more comfortable with the industrial-services company's prospects after a tough time earlier this year. But Team earnings will need to produce growth sooner or later in order for investors to get the longtime returns they want from the stock.
Team's focus is on systems that involved pressurized piping. The company serves refineries, petrochemical and power companies, pipelines, and other heavy-industry customers by building, monitoring, and maintaining pipe systems to ensure efficient operations and avoid lengthy downtime and potential safety problems. Let's take an early look at what's been happening with Team over the past quarter and what we're likely to see in its report.
Stats on Team
|
Analyst EPS Estimate |
$0.36 |
|
Change From Year-Ago EPS |
0% |
|
Revenue Estimate |
$176.7 million |
|
Change From Year-Ago Revenue |
9.4% |
|
Earnings Beats in Past 4 Quarters |
1 |
Source: Yahoo! Finance.
Can Team earnings score a victory for shareholders this quarter?
In recent months, analysts haven't changed their views on Team earnings much, cutting just a single penny per share from their August-quarter and full-year fiscal 2014 estimates. The stock hasn't moved much either, climbing 3% since late June.
Team had a tough time earlier this year, as it failed to meet its own guidance for the May quarter and had to reduce its projections near the end of the quarter. Moreover, its projections for fiscal 2014 were about 10% below where investors were expecting prior to the announcement, prompting a substantial drop in the stock.
But vast growth in the pipeline industry presents an immense growth opportunity for Team. With federal law requiring greater testing of pipeline integrity, customers will need the inspection services that Team provides in order to comply. That's one reason why Team restructured its operations to separate its industrial services unit into three divisions, focusing on inspection and heat-treating services, mechanical services, and the company's Quest Integrity subsidiary.
Still, Team has to face other companies in its industry. Furmanite (NYSE: FRM) provides somewhat broader engineering and project management services to companies in the petrochemical and refinery industries, with its purchase of Englobal's Gulf Coast operations earlier this month helping it broaden its energy-industry coverage. Mistras Group (MG +4.60%) has also made leak-monitoring and detection part of its broader range of services to help preserve the structural integrity and reliability of key energy and industrial infrastructure. Mistras has faced some challenges to its own growth lately, with margins facing some pressure because of costs of recent acquisitions.
In the Team earnings report, watch to see how well the company does at capturing the growth potential of the pipeline and energy industry. With so much growth in the sector, Team needs to do its best to make the most of the energy boom while it lasts.
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