Shares of Key Energy Services Inc. jumped in Friday trading, a day after the oil and gas well contractor reported second-quarter results and said it expects operating income to grow as much as 25 percent in the third quarter.
THE SPARK: The Houston company said its net income fell 19 percent to $29 million, or 19 cents per share, in the three months that ended June 30. That compares to earnings of $36.1 million, or 25 cents per share, in last year's quarter. The performance included a loss of about $2.5 million from discontinued operations.
Key Energy said earlier this year it was classifying its Argentine operations, which it intends to sell, as discontinued. Earnings from continuing operations totaled 21 cents per share.
Revenue rose 24 percent to $516 million.
Analysts surveyed by FactSet expected, on average, earnings of 19 cents per share on $522.1 million in revenue.
THE BACKGROUND: Key Energy provides maintenance and work-over services for onshore oil and gas wells. Company officials said they expect revenue to increase about 4 percent from the second quarter, and that could drive an operating income increase of between 20 percent and 25 percent.
Analysts expect third-quarter revenue of $561.7 million, according to FactSet, up 8.9 percent from the second quarter.
SHARE ACTION: Up 12 percent, or 89 cents, to $8.26, while the Standard & Poor's 500 index climbed 1.7 percent. The stock has declined 47 percent in the year to date.
