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Lufkin Says 1Q Profit Dropped, Makes Job Cuts

The Associated Press

LUFKIN, Texas (AP) — Lufkin Industries Inc. on Wednesday reported its profit slid 43 percent in the first quarter due to lower commodity prices. The oilfield services and equipment company also said it has cut jobs and spending.

First-quarter profit fell to $9 million, or 60 cents per share, from $15.6 million, or $1.05 per share, in the year-ago period.

Excluding a provision of 13 cents per share for a class-action lawsuit against the company and a loss of a penny per share from discontinued operations, Lufkin earned 74 cents per share in the latest period.

Analysts expected profit of $1.42 per share, according to a Thomson Reuters survey.

Revenue grew 9 percent to $153.1 million from $141.1 million. Revenue from the oil field business rose 11 percent to $111.7 million in the period, and power transmission revenue edged up 3 percent to $41.5 million.

Lufkin President and Chief Executive John Glick said the first quarter was one of the most difficult in several years, as the recession led to lower oil prices, and U.S. markets were particularly weak during the quarter. Contract bookings decreased compared to the previous quarter, and to the first quarter of 2008.

The company said it eliminated about 10 percent of its jobs, placed some workers on short weeks, and cut down on spending to cope with challenging economic conditions. It is also looking to end some supply chain contracts it signed late last year.

At the end of 2008, Lufkin employed about 3,000 people.

"We expect the market to be challenging over the next several quarters, although we are hopeful that we will begin to see some signs of stabilization and recovery in demand in the second half of 2009," Glick said in a statement.