(HOS) - Strong Buy - Companies obtain this coveted status by receiving upward earnings estimate revisions and achieving earnings per share surprises

Hornbeck Offshore Services, Inc. (HOS) was first presented as a Value stock on Mar 10 and is still a Zacks #1 Rank. The company met or topped analysts' earnings expectations for the past nine quarters. HOS recently upped its 2006 and 2007 earnings per share guidance. HOS has a price-to-book ratio of 2.0, compared to 5.0 for the market. Its return on equity of 16% betters the industry average of 15%. Full Analysis Hornbeck Offshore Services, Inc. provides offshore supply vessels for the offshore oil and gas industry, primarily in the United States, Gulf of Mexico and internationally. The company operates in two segments: offshore supply vessels and tug and tank barge. Nearly six months after HOS was first highlighted as a Value stock, it is still a Zacks #1 Rank (strong buy). Companies obtain this coveted status by receiving upward earnings estimate revisions and achieving earnings per share surprises. In the two quarters since its debut, HOS topped the Street's estimate by 10.2% in the first quarter of 2006 and met expectations in the second quarter. Even though the company failed to surprise to the upside in the second quarter, earnings skyrocketed 93.9% when compared to the prior-year period. Revenues soared 72.0% to $70.7 million compared to $41.1 million for the second quarter of 2005. Chairman, President and CEO Todd Hornbeck stated, "We are very pleased with yet another quarter of record financial results, which were largely driven by our diversified business model. With both of our fleet segments ‘hitting on all cylinders,' we continue to post industry-leading margins and returns on invested capital and have, again, significantly increased our annual 2006 and 2007 guidance." HOS now expects 2006 earnings per share between $2.60 and $2.72, compared to its prior guidance between $2.49 and $2.60. Moreover, the company also raised its 2007 profit guidance, now calling for earnings per share between $2.72 and $2.95, versus its previous outlook between $2.70 and $2.92. Analysts responded to HOS's revised guidance by boosting their profit forecasts. Consensus estimates for this quarter and next jumped 7.5% and 5.9%, respectively, over the past 30 days. Estimates for full years 2006 and 2007 rose 6.7% and 4.5%, respectively, in the same timeframe. Earnings per share are forecasted to grow a robust 42% over the next 3-5 years, with the industry expected to grow at a 15% clip. The company is currently trading at a valuation of 15.3x trailing 12-month earnings and at 12.3x current fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 16.5x trailing 12-month earnings and at 15.8x its current fiscal-year estimated earnings. HOS has a price-to-book ratio of 2.0, compared to 5.0 for the market and its PEG ratio currently stands at 0.29. The company's return on equity of 16% betters the industry average of 15%. 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