Lufkin Industries 3Q Profit Falls

LUFKIN, Texas (AP) -- Lufkin Industries Inc. said Wednesday its third-quarter profit tumbled 80 percent as the oil field pump supplier's revenue plunged and expenses edged higher.

But its shares rose more than 3 percent in morning trading as the earnings beat Wall Street expectations.

CEO John F. "Jay" Glick warned of more challenges ahead.

"Although there are encouraging signs that activity levels may be responding to a more stable commodity price environment, our operations continued to be negatively affected by uncertainties surrounding the short term direction and pace of the economic recovery and its impact on oil and gas demand," Glick said.

"As a result, we continued to see restricted capital spending from our customers."

Net income dropped to $5 million, or 34 cents per share, in the three months ended Sept. 30 from $24.8 million, or $1.65 per share, in the year-earlier period.

Analysts polled by Thomson Reuters expected, on average, earnings per share of 20 cents per share. The estimates typically exclude unusual items.

Revenue for Lufkin, which also makes industrial gearboxes, fell by about 40 percent to $117.7 million from $195.1 million.

Selling, general and administrative expenses rose to $17.8 million from $17 million. It expects "deleveraging of fixed overhead in the fourth quarter."

Lufkin shares rose $1.96, or 3.5 percent, to $58 in morning trading after rising to a 52-week high of $58.86 earlier in the session.