CARBO Ceramics

CARBO Ceramics Inc (CRR - Snapshot Report) shares set a new 52-week high as analysts raise estimates for the company, which has great fundamentals.

Company Description

CARBO makes ceramic proppant, a material used in fracturing gas and oil wells. Additionally, the company offers spill prevention and containment products and other services.

Great Sequential Growth

On Oct 29 CARBO announced third-quarter results that included a 3% decrease in proppant sales volume; however this was up 37% from the previous quarter. Revenues are up 32% since last quarter.

Earnings per share were 62 cents, beating the Zacks Consensus Estimate by 20 cents, or 48%. This was the ninth consecutive earnings surprise for CARBO.

A Positive Outlook

Gary Kolstad, CEO, said "From our perspective, we believe that a sustainable recovery in the oil and gas industry is inevitable; however, the exact timing of the recovery is difficult to pinpoint."

Given these results and comments, analysts were not shy about raising estimates.

EPS Momentum

Following the quarterly report, analysts raised estimates across the board. The full-year Zacks Consensus Estimate for this year is now $2.32, up from $1.97. Forecasts for next year are averaging $2.58, up 40 cents. The year-over-year growth is down slightly this year, but back up in 2010.

Industry Leader

CARBO is well ahead of other oil field service companies in several aspects. The company operates with a net profit margin of 29%, over 7 times higher than the industry average. Its ROE is 4% higher than the norm, at 13.8%.

The company manages all of this while carrying no debt, as its peers average a debt-to-equity ration of 32 times.

The Chart

CRR just set a new 52-week high as it broke out of the recent trading range. The MACD is showing signs that the momentum could continue. Take a look at the chart below.

Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service

Read the full analyst report on CRR