Why Newpark Resources' Shares Jumped

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.

Fool contributor Travis Hoium has no positions in the stocks mentioned above. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDrawThe Motley Fool has no positions in the stocks mentioned above. 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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