Why Willbros Group Shares Jumped

Why Willbros Group Shares Jumped

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 Willbros Group were pumping higher today, gaining as much as 20% after reporting second-quarter earnings last night.

So what: The energy services provider posted earnings of $0.02 per share, well ahead of expectations of a $0.08 loss, while revenue improved 8% to $487 million. Its utility transmission and distribution segment brought in operating profit of $15.6 million on cost cutting, countering the $18.8 million loss it took in oil and gas. Sales in Canada also more than doubled from a year ago. Management noted that June results in oil and gas were breakeven, and it expects improved performance in the coming quarters. Willbros' backlog remained at $2.0 billion, as it was three months earlier.

Now what: With the thorn its side from oil and gas apparently gone, profits should be looking up for Willbros. Analysts are expecting a $0.14 per share profit this quarter, but I'd expect those estimates to get a bump after today's report. If oil and gas operating income had been flat in the past quarter, earnings per share would have been around $0.28. With potential like that, shares should move higher if Willbros can get that division straightened out.

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