A profit warning from Baker Hughes weighed on oil services stocks Friday, even as the rest of the energy sector capped off a strong week of gains with more buying.
Oil stocks advanced as oil reversed two days of losses, rising 14 cents to $72.64 a barrel. The Amex Oil Index (XOI : 1,514.99, +10.86, +0.7% ) rose 0.7% to finish at 1,515. The big three U.S. oil giants all moved into the green, with ConocoPhillips (COP : 90.17, +1.53, +1.7% ) up 1.7% to $90.17, notching yet another all-time high. Exxon Mobil (XOM : 90.33, +0.71, +0.8% ) rose less than 1% to $90.33 as its market cap ballooned past the $500 billion mark a day earlier.
The Amex Natural Gas Index (XNG :521.74, +4.58, +0.9% ) added 0.9% at 522 points. The Philadelphia Oil Service Index ($OSX : 0.00, 0.00, 0.0% ) fell 0.3% to end at 274 points. Baker Hughes (BHI :84.00, -5.13, -5.8% ) dropped 5.8% to close at $84 after it said it expects second-quarter net income of $1.07-$1.09 a share, below the level of $1.17 a share in the first quarter.
Analysts surveyed by Thomson Financial forecast earnings of $1.18 a share for the latest period, on average. The Houston energy firm cited "significant deterioration" of activity and profitability in Canada in its drilling and evaluation segment.
Lufkin Industries Inc. (LUFK :65.31, -7.94, -10.8% ) shares dropped 10.8% to finish at $65.31 after the company said it expects second-quarter earnings of $1.13 a share to $1.15 a share for the three months ended June 30. Analysts surveyed by Thomson Financial forecast earnings of $1.19 a share, on average.
Based on softness in the North American oil field markets, Lufkin also has lowered the top end of its forecast for 2007 earnings to $4.60 a share to $5.00 a share verses its earlier view of $4.60 a share to $5.40 a share.
