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Analyst Blog

On Oct 17, Zacks Investment Research upgraded GulfMark Offshore Inc. (GLF - Snapshot Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

The marine service provider for the offshore oil and gas industry has delivered positive earnings surprises in the last 2 quarters with an average beat of 100.4%. The long-term earnings growth of the company is 15%.

GulfMark Offshore registered a positive earnings surprise of 25.71% in the second quarter. This has prompted the management to revise its full year revenue expectation to $450 million to $465 million from $425 million to $455 million provided earlier. The company expects third quarter revenue in the range of $118 million to 123 million.  

The company’s robust capital expenditure program will help it to develop more vessels and allow it to serve a wider customer base. GulfMark Offshore has plans to invest $198 million by 2015 and complete the construction of 11 vessels.  This indicates increasing offshore drilling in the forthcoming years.

The strong performance enables the company to reward its shareholders through regular dividend payments. In September the company paid a quarterly dividend of 25 cents to its shareholders.

The Zacks Consensus Estimate for 2013 increased 9% in the last 90 days to $2.66 per share, reflecting year-over-year growth of 241.28%. For 2014, the consensus increased 8% over the same time period to $4.73 per share, reflecting growth of 77.81%.

Other Stocks to Consider

Besides GulfMark Offshore, other companies in the sector are also performing well and have a favorable Zacks Rank. These stocks include Zacks Ranked #2 (Buy) Schlumberger Limited (SLB - Analyst Report), Exterran Holdings, Inc. (EXH - Snapshot Report) and Core Laboratories NV (CLB - Analyst Report).

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