It takes a seismic shift to flip a runaway energy bull market completely onto its backside.
Fools eager to ascertain when the sector might start heating up again could keep an eye on Dawson Geophysical
Dawson reported flat earnings of $7.7 million for the fiscal first quarter of 2009, on a 3% rise in revenue. EBITDA managed a 7% increase, but the quarter overall exhibits a seismic shift compared with the 29% earnings growth the company reported back in fiscal Q4 2008.
Responding to leaner times, Dawson announced a 25% reduction in operations by idling as many as four of the 16 active seismic survey crews. With some larger projects facing scaledowns and delays, and some being canceled outright, the move is only prudent, given the prevailing indications from natural gas producers. Chesapeake Energy
Dawson Geophysical is hardly the only energy services provider feeling the pinch. The Oil Service HOLDRS Trust
Fellow Fool Dave Smith prefers Dawson's marine-based competitor CGG Veritas
With a market capitalization of just $135 million, Dawson retains the kind of under-the-radar growth potential that caught the eye of our stock-picking team at Motley Fool Hidden Gems. With no long-term debt, $40 million in available credit, and about $2 per share in cash, the company appears well-positioned for the downturn. Given its adaptability -- seismic crews can be reactivated nearly as easily as they're idled -- I believe Dawson Geophysical will indeed prove to be a gem. I've just added the company to my CAPS portfolio, and I invite you to do the same.
Fool contributor Christopher Barker captains yachts and writes about stocks. He can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He owns shares of Chesapeake Energy. CGG Veritas is a Motley Fool Global Gains pick. Dawson Geophysical is a Motley Fool Hidden Gems recommendation. Chesapeake Energy is a Motley Fool Inside Value selection. The Motley Fool has a gaseous disclosure policy.