wade, TGE has some pretty bullish comments in their PRs, which could bode well for the future.
Company earned a partially taxed (25%) 0.09 in Q1. Assuming they can do the same for the next quarter, plus additional revs from the fourth crew coming on-line in Q3 and Q4 could put earnings around 0.40 (not sure what the final tax rate will be).
They did have some weather related problems last year in Q2, so they will have a favorable pretax comp:
"As previously reported on June 14, 2004, the Company recently deployed its third seismic crew in response to the increased level of activity in the domestic oil and gas market. The Company operated with only one seismic crew for 2003 and announced the addition of its second seismic crew on January 14, 2004.
Mr. Wayne Whitener, President and CEO of TGC Industries, Inc. stated, "We are very encouraged by the results for the first six months of 2004. Even though the Company's crews experienced inclement weather during the later part of the second quarter of 2004, management believes the Company will be able to operate at a three-crew level for the remainder of 2004 while continuing to improve its performance."
-from Q2 04
Hard for me to give this stock a 15-20x forward multiple, given the heavy cyclicality of the industry AND the weather related risk. It is trading at a 22x TTM PE, which is also inflated by lower than normal tax rates on eps.
All in all, I'd say its reasonably valued, but I don't have a good handle on what the extra seismic crew can do for revs and margins.
AI
