What: Shares of Newpark Resources (NYS: NR) jumped as much as 15% in early trading, after reporting earnings. However, as the day continued, shares trailed off and, as I am writing, shares are now up only 2.6%.
So what: Revenue rose 5.6% to $259.6 million in the third quarter, and net income rose 29%, to $18.7 million, or $0.20 per share. This was well above estimates of $0.17 in earnings per share from the seven analysts following the company.
Now what: Management is still seeing headwinds from a slowing rig count and a slowdown in Canada, so I wouldn't set expectations too high. But with shares trading at just nine times trailing earnings, I think there is upside, especially if energy prices rise as the economy improves. The pullback is a good entry point, although I wouldn't expect a pop in shares in the near term.
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The article Why Newpark Resources' Shares Jumped originally appeared on Fool.com.
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