(NBR) - This quarter's results represent another record for Nabors in all of our important financial metrics

Nabors Industries, Ltd. (NBR), a Zacks #1 Rank stock, beat the Street's earnings estimate in the past eight quarters by an average margin of 8.5%. Earnings per share are projected to grow 37.6% over the next 3-5 years. Analysts' profit forecasts have been trending higher. The company is trading at a discounted valuation, with a price-to-book ratio of 2.7, compared to 3.9 for the market. Full Analysis Nabors Industries, Ltd. conducts oil, gas and geothermal land drilling operations. The company owns and operates almost 600 land drilling and 970 land workover and well-servicing rigs worldwide. Offshore, NBR operates 44 platforms, 17 jack-ups and three barge rigs in the domestic and international markets. When it comes to exceeding analysts' earnings expectations, NBR shines brightly. The company topped the Street's estimate in the past eight quarters by an average margin of 8.5%. Furthermore, over the past 15 quarters, the company missed once, met once and surprised to the upside on 13 occasions. Earnings per share grew 21.6% over the past five years and are expected to grow by an even greater margin going forward-37.6% over the next 3-5 years. On May 8, 2006, NBR posted first-quarter profits of $256.8 million, or earnings per share of 79 cents, compared to $127.4 million, or 40 cents per share in the prior-year period. Analysts were projecting 74 cents, thus, the company produced a 6.8% positive earnings surprise. Revenues ballooned to $1.18 billion from $797.5 million. Gene Isenberg, Chairman and CEO stated, "This quarter's results represent another record for Nabors in all of our important financial metrics: operating income, cash flow, earnings per share and return on average capital employed." For the remainder of the year and beyond, Isenberg said the company is well on its way to handily exceeding its expectations. Analysts are also optimistic. The consensus earnings estimates for this quarter and next quarter jumped 6.0% and 8.8%, respectively, over the past 90 days. As far as this year and next, profit forecasts have risen 8.3% and 12.8%, respectively, over the past three months. Seven analysts submitted upward revisions for this year while eight followed suit for next year. Despite the company's strong earnings history and projected growth rate, NBR is currently trading at a valuation of 13.4x trailing 12-month earnings and at 9.7x current fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 16.7x trailing 12-month earnings and at 15.5x its current fiscal-year estimated earnings. Furthermore, NBR has a price-to-book ratio of 2.7, compared to 3.9 for the market. NBR increased revenues, expanded gross margins and grew profits for the past three years, most recently by 45.1%, 77.5%, and 114.5%, respectively, in 2005. The company's return on equity exceeds that of the industry average-22% compared to 16%. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. Blog Home