CEO: Runaway growth for Layne Christensen's minerals exploration
Layne Christensen Co. (Nasdaq:LAYN) CEO Andrew B. Schmitt said weather has delayed the water services and minerals exploration company’s operations, but energy prices and other factors have helped offset expenses. He said the firm does not expect a drilling slowdown during the year and will make decisions on some of its oil properties. Schmitt made the comments during a midday conference call.
“No matter how you cut it, it’s going to be a busy year for us and we’ll have to see if we can successfully manage whatever this U.S. economy brings us,” Schmitt said. “Layne Energy will eventually get a break on the weather and production should continue to steadily move up as we get wells online.”
Layne will begin a five-year test program on its 37,000-acre Indiana gas exploration property this summer. The firm will also make a decision on its test wells in Chili, he said.
Before Tuesday’s opening, Layne Christensen reported that its fourth-quarter earnings rocketed 44% to $9.6 million, or $0.50 per share, from $6.7 million, or $0.42 per share, a year earlier. Wall Street analysts, on average, projected earnings of $0.37 per share.
Quarterly revenue for the three months ended Jan. 31 rose 16% to $223.6 million from $193.1 million during the year-ago period. Analysts expected $214.5 million in revenue.
“From an operating standpoint, it was a good year with all three business units moving the needle on revenue,” Schmitt said. “Clearly, the runaway leader in the earnings growth was the minerals exploration.”
Revenue from Layne’s mineral exploration swelled 28% to $47.6 million during the fourth quarter, from $37.3 million a year earlier. The CEO said mineral exploration segment is not likely to see drilling slowdown during 2008.
Cost of revenue during the quarter increased to $165.6 million from $144.8 million a year earlier. Selling, general and administrative expenses rose to $30 million from $27.3 million during the fourth quarter of 2007.
“Recent spikes in energy prices have helped offset our operating expenses,” Schmitt said.
In afternoon trading, LAYN shares are up 22.37%, or $8.07, at $44.14. Shares have ranged between $32.08 and $59.19 over the last 52 weeks.
