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The energy service companies are hot, hot, hot. Mitcham Industries, Inc. just reported record fiscal third quarter results and beat the Zacks Consensus by 100%. Despite shares being at multi-year highs, this Zacks #1 Rank (strong buy) is still a value stock with a forward P/E of 11.6.

Mitcham supplies rental or new seismic equipment to the oil and gas industry, seismic contractors, government agencies and universities. It also manufactures specialized seismic marine equipment through its Seamap brand.

A global company headquartered in Texas, it has sales and service offices in Canada, Australia, Singapore, Russia, Peru, Colombia, and the United Kingdom.

On Oct 6, the company announced a new warehouse, logistics and repair facility in Budapest, Hungary which it believes will tap into the capital spending on oil and gas exploration in Eastern Europe.

It's a Record Quarter

On Dec 6, Mitcham Industries reported its fiscal third quarter results and blew by the Zacks Consensus Estimate. It wasn't even close. Earnings per share were 52 cents compared to the consensus of just 26 cents. The company made just 7 cents in the year ago quarter.

Revenue rose 40% to a record $28 million from $20 million in the year ago quarter as equipment leasing revenue soared 116% to $17.4 million.

Usually first quarter is the strongest quarter in equipment leasing for the company with the third quarter the second weakest of the year. The third quarter revenue, however, for the first time, surpassed even that of the first quarter.

Latin America continues to see strong customer demand and increased utilization. The company deployed more equipment to the region in the second quarter which paid off in the third quarter.

International sales are huge for the company. 71% of the revenue in the quarter was from international customers compared to 80% in the year ago quarter.

The U.S. also saw increased activity due to demand for higher resolution 3D imaging in the challenging shale plays. There was also strong demand in some international markets such as the Pacific Rim and North Africa.

The marine segment wasn't a slouch either as it posted a record quarter on strong demand and an increase in the duration of many of the marine equipment rentals.

Zacks Consensus Estimates Soar on Strong Quarter and Bullish Outlook

Mitcham remained upbeat about the future. It continues to receive orders for longer-term jobs with higher channel counts. The company also expects the upcoming winter season in Russia and Canada to be strong.

Given the huge beat in the third quarter and continued optimism, the analysts have scrambled to raise fiscal 2012 and 2013 estimates.

The fiscal 2012 Zacks Consensus Estimate jumped to $1.78 from $1.40 in the last 7 days.

That is earnings growth of 425% as the company made just 34 cents in fiscal 2011.

Earnings are expected to grow another 39% in fiscal 2013 as the Zacks Consensus rose to $2.48 from $2.01 per share since the earnings announcement.

Still a Cheap Stock

Mitcham shares soared after the big earnings beat to a new multi-year high.

But with rising estimates accompanying the rising shares, Mitcham is still a value stock.

In addition to a P/E under 12, the company has a price-to-book ratio of only 1.8. A P/B under 3.0 usually indicates "value."

With no signs of a slowdown in the oil and gas industries, either in the U.S. or internationally, Mitcham is an attractive combination of both growth and value.

Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her at

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