(ALY) - Posted profits in the first quarter of 2006, which topped estimates by an impressive 64.3%

Allis-Chalmers Energy, Inc. (ALY), a Zacks #1 Rank stock, crushed analysts' earnings expectations over the past two quarters by an average margin of 78.3%. The company increased revenues and expanded gross margins for the past six years. Consensus estimates have shot upward over the past 60 days. ALY's recent acquisitions should help fuel future growth. The company has a price-to-book ratio of 2.6, compared to 5.3 for the market. Full Analysis Allis-Chalmers Energy, Inc. provides services and equipment to oil and natural gas exploration and production companies located primarily in Texas, Louisiana, New Mexico, Colorado, Oklahoma, the United States Gulf of Mexico and offshore and onshore in Mexico. ALY has absolutely crushed the Street's earnings estimate over the past two quarters. In the first quarter of 2006, ALY posted profits of 23 cents per share, which topped estimates by an impressive 64.3%. Compared to its second-quarter results, however, this surprise paled in comparison. For the second quarter, analysts were calling for 26 cents per share. On Jul 20, ALY reported second-quarter earnings per share of 50 cents, equating to an eye-popping 92.3% surprise. Revenues rose 156.4% to $60.5 million compared to $23.6 million for the prior-year period. The company's rental tools segment experienced the biggest jump in revenues, soaring to $7.3 million from $405,000 a year earlier. For the first six months of the year, profits and revenues ballooned 324.2% and 150.6%, respectively, when compared to the first six months of 2005. The company increased revenues and expanded gross margins for the past six years. Profits have grown for four years running. ALY's strong second quarter and first half of the year prompted analysts to dramatically alter their earnings forecasts. Consensus estimates for this quarter and next have risen 63.0% and 71.4%, respectively, over the past 60 days. Profit forecasts for the full years of 2006 and 2007 climbed 61.0% and 47.4%, respectively, over the same period of time. The company has been fairly active in the acquisitions arena. ALY completed its purchase of DLS Drilling Logistics and Services Corporation on Aug 14. Chairman and Chief Executive Officer Micki Hidayatallah stated, “We are extremely excited about closing the DLS acquisition. We now have a significant entry into the international drilling, workover and production business, and we expect this entry to facilitate our international expansion of services.” ALY also should benefit from its acquisitions of Specialty Rental Tools in January and Rogers Oil Tool Services in April. ALY is currently trading at a valuation of 13.3x trailing 12-month earnings and at 7.5x current fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 16.9x trailing 12-month earnings and at 15.9x its current fiscal-year estimated earnings. The company has a price-to-book ratio of 2.6, compared to 5.3 for the market. ALY's return on equity of 27% betters the industry average of 16%. 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