Why Key Energy Services' Shares Popped


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of energy service company Key Energy Services (NYS: KEG) rose 13% today after the company reported earnings.

So what: Revenue rose an impressive 24% to $516 million, but fell short of the $522 million number analysts expected. Net income was $29 million, or $0.19 per share. Earnings from continuing operations were $0.21, $0.02 ahead of estimates.

Now what: The numbers were fairly good but net income did fall 19% in the quarter despite the rise in revenue. Management is expecting a 20%-25% increase in operating income next quarter so the numbers should get better from here. With shares trading at 10 times trailing earnings I think the stock can still move higher, but I would like to see margins improve before pushing all-in on the stock.

Interested in more info on Key Energy Services? Add it to your watchlist byclicking here.

The article Why Key Energy Services' Shares Popped originally appeared on Fool.com.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Originally published