WEL - Boots & Coots - Analysts responded to the company's forecast by raising estimates for the first quarter by 50%

Boots & Coots is finding growth and higher profits in being specialists in oil well emergency response. The company surprised on earnings by 166.67% in the fourth quarter. Analysts forecast juicy year-over-year growth of 113.64% for 2008. The company trades with a P/E of only 6.41.

Full Analysis

Boots & Coots International Well Control, Inc. (WEL) offers oil well services and emergency response to onshore and offshore oil and gas exploration companies around the world.

Boots & Coots, a Zacks #1 Rank (Strong Buy), has two segments: Well Intervention and Response.

The Well Intervention segment handles critical well events such as well fires, blowouts or other losses of control at the well. Well Intervention also includes prevention services such as training, contingency planning, well plan reviews, audits, inspection services and engineering services.

The Response segment responds to the emergencies by sending personnel, equipment and services to a critical well event or a hazardous material response.

On March 10, the company reported fourth-quarter earnings and surprised by five cents, reporting net income of $5.8 million, or eight cents per share, compared to $4.5 million, or seven cents per share, in 2006. Analysts expected three cents a share.

Revenues for the quarter were $36.1 million compared to $33.7 million for the fourth-quarter 2006.

The Well Intervention segment was the company's big revenue producer in the quarter. It generated revenues of $31.3 million compared to revenues of $22.5 million in the year-ago period. Part of the increase in revenues was due to growth in international operations as well as domestic initiatives including the acquisition of StassCo in the Rocky Mountains.

The Response Segment saw a decline from a year ago. It generated revenues of $4.9 million compared to revenues of $11.2 million in 2006. Lower international activity resulted in the reduced revenues in the segment.

"Fourth quarter results have moved the company over the $100 million revenue milestone," said Jerry Winchester, president and chief executive officer. "The strong quarter is a direct result of the investment initiatives we made during 2007, including our redeployment of underutilized assets."

Boots & Coots raised its forecast for the first-quarter 2008 after seeing greater than expected activity in both of its segments. WEL gave guidance of a range of six cents to seven cents a share. Brokerage analysts had been estimating four cents a share.

Analysts responded to the company's forecast by raising estimates for the first quarter to six cents from four cents a share. For the year, two out of two covering analysts also raised consensus estimates by six cents to 23 cents from 17 cents a share.

Boots & Coots is extremely cheap. WEL trades at a 2008 P/E of 6.41, which is under the industry average of 10.9. Its price-to-book is 1.57. The company has a tremendous five year average return on equity of 41.04%.

Content Courtesy: Zacks Investment Research

#1 Ranked Stocks Highlight Archive
To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions.

| Blog Home| VitalStocks Home