LUFKIN, Texas (AP) — Shares of Lufkin Industries Inc. plunged Monday after the oilfield-services operator reported disappointing second-quarter results and sharply cut its forecast for full-year earnings.
Lufkin blamed labor unrest in Argentina, lower revenue from natural gas and power transmission in the U.S., and the costs of increasing production to meet demand.
"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," said CEO John F. Glick. He said the climate there was making it difficult for customers to get their equipment.
Low natural gas prices are also hurting business, Glick said.
The company said full-year earnings would be $3 to $3.20 per share, down from an earlier forecast of $3.75 to $4.05 per share. The revenue outlook was cut to between $1.25 billion and $1.27 billion, down from between $1.25 billion and $1.30 billion. Analysts were expecting $3.74 per share and $1.28 billion, according to FactSet.
The shares fell $12.20, or 20.6 percent, to $47.13 in afternoon trading. In the past year, they have ranged between $42.10 in October to $85.68 in February.
Second-quarter net income rose 5 percent to $19.3 million, or 57 cents per share, from $18.5 million, or 60 cents per share. Excluding items such as acquisition-related costs, a pension item and costs of settling a class-action lawsuit, the company said it would have earned 66 cents per share.
Analysts expected 82 cents per share.
Revenue grew 35 percent to $305.6 million, but that was still short of analysts' forecast of $307.7 million.