LUFKIN (KYTX) - Shares of Lufkin-based Lufkin Industries plummeted more than 20 percent today after the oilfield artificial lift systems manufacturer fut its full-year forecast amid disappointing second quarter earnings.
"While revenues for the second quarter of 2012 increased 35% to $305.6 million compared to $226.8 million for the second quarter of 2011, and 9% from the first quarter of 2012, adjusted net earnings came in below guidance, primarily due to problems in the company's Argentina operations, increased manufacturing spending in North America, and lower revenues in gas related markets and in the U.S. Power Transmission division," a media release stated.
Shares dropped 20.6 percent, of $12.20, to $47.13 in afternoon trading. Shares were as high as $85.68 as recently as February.
Full-year earnings are expected to reach a maximum $3.20 per share, down from the $3.75 to $4.05 per share that was earlier forecast. Revenue outlooks were cut from $1.3 billion to as much as $1.27 billion.
John F. "Jay" Glick, president and CEO of Lufkin Industries, said in the media release, ""Argentina continued to negatively impact our second quarter earnings as a result of labor unrest that disrupted normal manufacturing and field service operations. The current operational challenges in Argentina also impacted our customers' ability to accept deliveries.
"However, we received several large multi-quarter orders from major customers in Argentina very late in the second quarter," Glick continued. "Since these orders had been expected early in the quarter, the delay in order placement resulted in a shortfall in revenues and lower utilization levels at the factory and in the field. Additionally, a large order for automation equipment for Romania that was anticipated earlier in the year, slipped into the third quarter. We now have that order, but the revenue that we expected early in the second quarter was delayed until the third quarter. As a result, we were not able to offset the increased spending associated with the new staffing costs in Romania.
