* Sees Q3 EPS $0.60-$0.63 vs analysts’ view of $0.56
* Sees revenue of $278 million
(Adds analyst comments, updates share movement)
Oct 20 (Reuters) - Oil services company Basic Energy Services Inc (BAS.N) forecast third-quarter results above analysts’ expectations, sending shares of the company up as much as 14 percent in morning trade.
Barclays Capital analyst James West said the results were driven by better-than-expected utilization for the company’s well servicing and completion equipment, as well as their drilling rigs.
The analyst said although he anticipated slower activity in the domestic land market, the downside would likely be limited due to the company’s leverage to more stable, production-related businesses and its growing exposure to service-intensive shale plays.
West, who has an “overweight” rating and a $21 price target on the stock, also said he expected a more challenging operating environment in the first half of 2009, stemming from weaker commodity prices and lower upstream spending.
The company said it expects third-quarter earnings in the range of 60 cents to 63 cents a share on revenue of $278 million.
Quarterly earnings would include a charge of $800,000, or 2 cents a share, related to its failed merger with larger peer Grey Wolf Inc GW.A, Basic Energy said.
Grey Wolf shareholders had voted down management’s attempt to buy Basic Energy in July, and Grey Wolf subsequently agreed to be bought by Canada’s Precision Drilling Trust PD_u.TO.
Analysts on average, are expecting earnings, before special items, of 56 cents a share, on revenue of $257.9 million, according to Reuters Estimates.
Shares of the company were trading up about 6 percent at 12.96 in afternoon trade on the New York Stock Exchange.
Reporting by Adveith Nair and Shradhha Sharma in Bangalore; Editing by Anil D'Silva