SEACOR Holdings Inc. (CKH) is making profit off of its diverse range of shipping services. The company has surprised on estimates 2 out of the last 4 quarters on average of 5.91%. CKH is cheap. It’s trading at only 7.8x forward earnings.

Company Description

SEACOR provides marine support and transportation services mainly to the energy and chemical industries worldwide. The company’s services include offshore services, U.S. coastwise shipping, aviation services, and offshore and harbor towing services.

SEACOR, a Zacks #1 Rank (strong buy), also operates dry and liquid bulk commodity barges along the U.S. inland waterways and offers environmental response to governments and industry, especially in oil spill response and hazardous material clean-up.

SEACOR Beat Wall Street Estimates for the Third Quarter by 27.54%

On Oct 22, SEACOR reported third-quarter earnings that surprised on estimates by 57 cents. Earnings per share were $2.64 compared to analysts’ estimates of $2.07. Net income rose to $75.6 million from $70.3 million in the year ago period.

Revenues jumped 22% to $437.6 million from $359.9 million in the third-quarter of 2007. Offshore Marine Services was particularly strong as revenues grew to $196.9 million from $171.2 million in the prior quarter.

The increase was attributed to growth in time charter revenues, especially in the Gulf of Mexico where the company’s large AHTS vessels completed their regulatory repair and upgrade program.

Revenues also grew in the Inland River Systems segment due to higher freight rates and increased activity on the lower Mississippi due to the beginning of the grain harvest.

Hurricane Gustav provided a bump to the company’s Environmental Services segment as it saw an increase in response activity because of the storm. Revenues grew to $42.2 million compared to $38 million in the second-quarter 2008.

Only the Marine Transportation segment struggled in the quarter. It posted a loss of $4.3 million due to 117 days of out-of-service time for two vessels undergoing regulatory drydockings in Asia. The drydocking resulted in a loss of $7.4 million.

Stock Buyback Program

During the third quarter, SEACOR purchased 1,166,000 shares of common stock at an average price of $83.43 per share as part of its ongoing $150 million stock repurchase program. As of the end of the quarter, 19,975,727 shares of common stock remained outstanding.

Consensus Estimates Rise for the Full Year

Covering analysts are bullish about the full year, as consensus estimates jumped 9% in the last week to $7.93 per share. Fourth-quarter consensus estimates are holding steady at $2.03 per share.

Value Fundamentals

SEACOR is an attractive value stock. It’s trading at only 7.8x forward earnings. Its price-to-book is 0.89. The company also has a solid 5-year average return on equity (ROE) of 10.18%.

Content Courtesy: Zacks Investment Research

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