July 26, 2011 / 4:43 PM / 6 years ago

UPDATE 3-Trucking rebound, oilsands contracts drive Mullen Q2 beat

* Q2 adj EPS C$0.19 vs est C$0.09

* Q2 rev up 36 pct, tops estimates

* Sees rising demand for trucking business

* Shares up 7 percent, touch highest level since Aug 2008 (Adds details on dewatering business, analyst comments)

By Gowri Jayakumar

BANGALORE, July 26 (Reuters) - Mullen Group’s second-quarter results topped market estimates as higher oil prices drove drilling activity in Alberta’s oilsands and the trucking company signalled rising demand for its cargo and freight shipping businesses.

The strong results drove Okotoks, Alberta-based Mullen’s shares up 7 percent to their highest in nearly three years at C$23.23 on Tuesday.

The company’s quarterly revenue was also boosted by a dewatering contract awarded by Canada’s biggest oil and gas company, Suncor Energy . Dewatering involves pumping out waste water from mine shafts.

“(Mullen‘s) Canadian Dewatering unit has probably been their strongest growing business for the last couple of years,” said Jeff Fetterly, an analyst with CIBC World Markets.

The company, which recently bought small freight shippers Hi-Way 9 group of companies, continues to see improving demand for its traditional trucking businesses, reflecting shrinking capacity in the North American trucking industry.

Truckers had suffered during the recession, hurt by low demand, trucking overcapacity and pricing pressures. But now freight transportation has begun to pick up as manufacturing and consumer spending rise in an improving economy.

“The trucking business is starting to get better and accelerate from a growth standpoint, but it is still lagging the growth on the oilfields services side,” Fetterly said.

“It is still a competitive and difficult business to be in.”

The company, which mostly serves the Canadian oilfield sector, saw revenue at its oilfield services unit rise 44 percent, while trucking and logistics rose 25 percent to C$118.1 million during the second quarter.

Mullen earned 19 Canadian cents a share, excluding items, topping analysts’ forecast of 9 Canadian cents a share, according to Thomson Reuters I/B/E/S. Revenue rose 36 percent to C$290.8 million, above market estimates of C$251.4 million. ($1 = 0.944 Canadian Dollars) (Reporting by Gowri Jayakumar in Bangalore; Editing by Gopakumar Warrier, Viraj Nair)

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