Tag - Frm

Spreading joy up to the maximum and bringing gloom down to the minimum: that’s the goal of Furmanite Corp. (NYSE:FRM). It’s been a profitable mission, too: the industrial services company just reported a pipeline of profits in its second quarter, strength that — barring a global recession — should continue for some time to come.

Dallas, Texas-based Furmanite focuses on maintaining high-pressure piping systems, of which leak sealing is a specialty. Its global technical and field services are for offshore drillers, pipelines, refineries and power generators, as well as chemical and petrochemical plants and other industries.

Furmanite is all about maximizing uptime and keeping downtime to a minimum, accentuating the positive and eliminating — or at least minimizing — the negative. It’s been in the pipe-fixing game for 80 years and is now reaping heady profits as high oil prices encourage capital spending by refiners and as other global industries invest in stressed-out infrastructure. Its strong financial performance is one affirmative; its global presence another.

In the quarter ended June 30, the company doubled earnings per share, reporting $0.21 compared with $0.11 in the previous year’s second quarter.  Revenues rose 21% to $90 million. For fiscal 2008, the average of three analysts puts earnings at $0.59, up 69% from $0.35 in 2007. Revenues are seen at $335.27 million, up 16%.

“In short, the demand for pipeline repair and monitoring services is about as robust as it has ever been,” wrote analyst Richard Nelson of Jesup and Lamont in early August, after the second-quarter results. Nelson raised his target to $12.50 from $10.50 and repeated his “buy” rating. Furmanite settled Friday at $11.56, at the high end of its 52-week range from $7.40 to $13.

Furmanite’s growth enhances its competitiveness and suggests long-term growth is achievable, Nelson said. The company now has 70 service centers worldwide; . . .

Shares of Furmanite Corp. (NYSE: FRM) are up 13% on the heels of a before-opening announcement that the company had doubled its earnings and beat analystsʼ estimates for the second quarter.

For the three months ended June 30, the Dallas-based technical services firm reported net income of $7.7 million, or $0.21 per share, compared with $3.9 million, or $0.11 per share, for the same quarter last year.

Analysts on average had expected Furmanite to post earnings per share of $0.12.

During the quarter, Furmanite increased worldwide revenue by 21%.

At 2:47 ET , shares were at $10.29, up $1.20 from Thursdayʼs close. The stock has ranged between $6.70 and $13.00 in the past 52 weeks.For detailed price information and recent news stories about Guidance Software, click FRM.

The Russell 2000 (NYSE: IWM) and the Dow are deep in negative territory on news of liquidity problems at Bear Stearns.

At 12:23 p.m. ET, the small-cap index had shed 14.42 points, or 2.12%, to 665.29. The Dow Jones Industrial Average (INDU) was down 177.96 points, or 1.47%, to 11,967.78.

The bears are running the show on news shortly after the opening that brokerage house Bear Stearns (NYSE: BSC) has seen its cash position deteriorate significantly over the past 24 hours, necessitating emergency short-term financing from J.P. Morgan Chase & Co. (NYSE: JPM) and the New York Federal Reserve.

Bear Sterns has been among the financial companies most severely affected by the meltdown in the subprime mortgage sector.

In economic news, the University of Michigan reported after the start of trading that its preliminary index of consumer confidence fell to 70.5 in early March from 70.8 in February. Economists were expecting to see a steeper decline.

With stocks falling, shares of airline companies are leading the descent.

With the onset of old age, there invariably comes the tweaking of this or the fine-tuning of that, and with industrial infrastructure it is no different. Furmanite Corporation (NYSE: FRM) and Team, Inc. (Nasdaq: TISI) are capitalizing on the growth opportunities in this sector by providing the repair services that keep it operating.

Refineries and power generation plants worldwide are operating at record high utilization rates to keep pace with rising demand. These plants suffer from frequent leaks and breakdowns because of overworked, poorly maintained equipment. In North American alone, the market for on-stream leak repairs consists of more than 10,000 plants and represents a $2.5 billion annual market opportunity. Demand is stable since repair services are considered a “necessary evil” and performed regardless of plant profit margins.  

One company performing the necessary evil is Furmanite, a provider of on-site repair of leaks in valves, pipes and other flow process system components. In addition to leak repair, Furmanite provides hot tapping services, fugitive emissions monitoring, passive fire protection, concrete repair, heat exchanger design, manufacturing design and repair and diagnostic services for valves and motors.

Formerly known as Xanser Corp., the company took the name of its principal subsidiary, Furmanite, in May 2007.

Furmanite’s customers come from the offshore drilling, refinery and power generation, chemical and petrochemical, pipeline, steel-making, automotive, pulp and paper, food and beverage processing, semiconductor and pharmaceutical manufacturing industries. The company operates from 50 locations across five continents.

Furmanite Corporation (NYSE: FRM)
Richardson, Texas
http://www.furmanite.com/

52-week low / high: $4.90 / $13
Shares Outstanding: 36 million
Market Capitalization: $341 million

If “everything’s bigger in Texas,” then it would only be apropos for Richardson, Texas-based Furmanite Corporation (NYSE: FRM) to be one of the world’s biggest specialty technical service companies delivering engineering solutions that keep facilities operating.

Founded in 1927, Furmanite, formerly Xanser Corporation, primarily caters to electric power generating plants, petroleum refineries and other process industries in 25 countries, including the United Kingdom, Continental Europe, North America, Latin America and Asia-Pacific.

The company operates in two segments: technical and government services, and conducts its principal businesses through subsidiaries operated through Furmanite Worldwide, Inc., along with domestic and international subsidiaries and affiliates.

Within its tech services segment, Furmanite’s offerings get down and dirty with online repairs of leaks in valves, pipes, onsite machining, bolting, valve repair and valve testing. The small cap also provides hot tapping, fugitive emissions monitoring, passive fire protection, concrete repair and diagnostic services on valves and motors by utilizing its Trevitest system, among other methods.

In its government services segment, Furmanite operates through its subsidiary, Xtria LLC, which offers products and services ranging from Web-hosted data processing to policy analysis and program implementation to agencies of state and federal government.

Though the industry Furmanite inhabits isn’t one of the sexiest, it still has its rewards.

For the third quarter ended Sept. 30, 2007, revenues rose 23% to $74.2 million, from $60.3 million a year earlier. It reported net income of $3.6 million for the third quarter, compared with a net loss of $3.3 million for the prior year’s quarter. For the nine months ended Sept. 30, Furmanite reported revenues up 21% to $217.4 million, compared with $179.6 million, and net income of $9.1 million, compared with a net loss of $2.6 million for the prior-year period.

Based on its recent numbers, Furmanite has the potential to push the growth envelope even more in the future. Because the company is an essential element to the operation of many process manufacturers, energy producers, and suppliers in a quilt of countries across the globe, there is no foreseeable dearth of business for Furmanite.

Michael L. Rose, president of Furmanite, has a confident outlook on the company’s future.

“Going forward, we see continuing opportunities for growth in every region we serve around the world," he said, in a press release on Nov. 8.

For an investor, what’s sexier than that?

Note: Furmanite Corporation (NYSE: FRM) is on the “Watch List” of Rising Star Stocks, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, Furmanite displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Rising Star Stocks portfolio at a later date.