(GRP) - Consensus estimates for this quarter and next quarter have risen 15.1% and 16.7%, respectively

Grant Prideco, Inc. (GRP), which is a Zacks #1 Rank stock, beat the Street's earnings estimate for the past 11 quarters by an average margin of 16.5%. The company posted record second-quarter results in late July and upped its earnings per share guidance for the full year of 2006 as a result. Consensus estimates have been on the rise. GRP has a price-to-book ratio of 4.1, compared to 5.3 for the market. Its PEG ratio currently sits at 0.46. Full Analysis Grant Prideco, Inc. is the world's leader in drill stem technology and drill pipe manufacturing, a global leader in drill bit technology and manufacturing and a leading provider of high-performance engineered connections and premium tubular products. GRP's history of exceeding analysts' earnings expectations is truly remarkable, having done so for 11 consecutive quarters by an average margin of 16.5%. On Jul 24, the company's profits for the second quarter amounted to $105.6 million, or 79 cents per share. The consensus earnings estimate for the quarter was 69 cents, thus, GRP surprised to the upside by a solid 14.5%. Its year-over-year improvement was even more impressive. The company's earnings in the prior-year period came in at 41 cents, representing a 92.7% advance in the second quarter of 2006. Revenues increased 36.3% to $431.8 million. Chairman and CEO Michael McShane stated, “We are pleased to report another quarter of record earnings due to strong demand for our products and services.” As a result, the company upped its earnings per share forecast for the full year of 2006 to $3.20. GRP's previous guidance called for profits between $2.75 and $2.85 per share. Furthermore, McShane commented, “Record backlog and recent capacity increases in our Drilling Products division give us excellent visibility extending into 2007.” Over the next 3-5 years, analysts expect the company's earnings per share to grow at a 26% clip—topping the 24% forecasted growth rate of the industry. During the quarter, the company bought back 709,600 shares of its stock for a total purchase price of $31.3 million. Year to date, GRP repurchased $51.5 million worth. Back in late February, the Board of Directors approved a stock repurchase program in which the company can buy back up to $150 million of its common stock. Consensus estimates for this quarter and next quarter have risen 15.1% and 16.7%, respectively, over the past 60 days. Profit forecasts for the full years of 2006 and 2007 are also trending higher, jumping 10.7% and 10.6%, respectively, over the same period of time. GRP is currently trading at a valuation of 15.2x trailing 12-month earnings and at 11.8x 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 15.7x its current fiscal-year estimated earnings. The company has a price-to-book ratio of 4.1, compared to 5.3 for the market. Its PEG ratio currently sits at 0.46. GRP's return on equity betters that of the industry average—32% compared to 20%. 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| VitalStocks Home