(DRC) – Dresser-Rand Group – earnings grow more than 78%, it remains reasonably priced with a PEG ratio of .58
Dresser-Rand Group, (DRC) continues to make strategic acquisitions and recently announced solid second-quarter results. While the company has seen quarterly earnings grow more than 78%, it remains reasonably priced with a PEG ratio of .58.
Company Description
Dresser-Rand Group is an international supplier of machinery for oil, gas, and related industries. The company is headquartered in Houston, Texas, carries a market cap of $3.2 billion and employs over 6,000 people.
A Solid Quarter
On July 30th Dresser-Rand announced second-quarter earnings of 55 cents per share, a 78% year-over-year increase. Earnings were 28% higher than the 42 cents per share expected by analysts. This is the third surprise in the last four quarters.
Total revenue was also up 22.7%, $541.2 million from $441.2 million in the same quarter last year.
The company also announced significant progress on two of its strategic initiatives Incorporatedluding acquisitions and repurchasing company stock. Dresser-Rand has repurchased approximately 75% of the $150 million worth of stock allotted under the plan announced earlier this year.
Expanding Through Acquisitions
On August 8th the company announced the future acquisition of Arrow Industries, Inc, which specializes in reciprocating engines and compressors used in pipelines. Arrow has provided services for Dresser-Rand in the past and will bolster the company’s pipeline services.
Dresser-Rand also announced the completed acquisition of assets from Enginuity LLC. Enginuity will enhance Dresser-Rand presence in the gas transmission market and recorded $16 million in sales for 2007.
The Chart
The stock is consolidating near $37.50 per share following the second-quarter announcement. Shares of DRC were in a downward trend over a month leading up to the earnings surprise.
Content Courtesy: Zacks Investment Research
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