HARTFORD, Conn. (AP) ¿ An analyst upgraded Willbros Group Inc. Friday on signs that the oil industry contractor's key operations are improving.

Analyst Tahira Afzal of KeyBanc Capital Markets upgraded the Houston company to Buy" from "Hold" and established a price target of $21.

Willbros Group reported worse-than-expected third-quarter earnings Wednesday, but its revenue surpassed Wall Street expectations.

Afzal said in a client note that Willbros management provided an upbeat outlook for its explorations and refining businesses in the first half of 2010.

However, she warned that Willbros Group's share price could "remain choppy" after spiking 11 percent Thursday on good news about the company's bookings in the third quarter. Consistent bookings growth will not likely return until the second half of next year, she said.

Willbros said Wednesday it earned $1.7 million, or 4 cents per share, down 92 percent from $19.7 million, or 49 cents per share in the same quarter last year.

Analysts surveyed by Thomson Reuters expected Willbros Group to earn 11 cents per share.

Revenue for the quarter ended Sept. 30 was $247.5 million, down 50 percent from $490.7 million in the year-ago period.

Analysts expected revenue of $223.3 million, according to Thomson Reuters.

The company cited lower than expected utilization rates because of project delays and cancellations, higher levels of non-project staff and inclement weather.

Separately, Jefferies & Co. analyst Stephen D. Gengaro said in a client note that the quarter's results were lackluster but said the shares are attractive given the expected rebound in demand.

Gengaro rates the shares "Buy."
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