October 29, 2009 / 11:35 AM / in 10 years

CORRECTED - CORRECTED-UPDATE 2-Carbo Ceramics Q3 beats market, shares jump

(Corrects typo in company name in headline)

* Q3 shr $0.62 vs est $0.42

* Remains cautious on outlook

* Says pricing to remain competitive near term

* Shares rise 19 pct (Recasts, adds analyst comments, share movement)

Oct 29 (Reuters) - Carbo Ceramics Inc (CRR.N) reported a better-than-expected third-quarter profit as the ceramic proppant supplier saw a positive trend in North American rig count, sending its shares up 19 percent to a new year-high.

However, Carbo Ceramics, which provides chemical particles used in oil and gas drilling, remained guarded in its outlook.

“While we experienced a positive trend this quarter in the North American rig count... opinions vary as to whether this is the start of a recovery or simply a short-term correction,” Chief Executive Gary Kolstad said in a statement.

Kolstad also said that the exact timing of the recovery is difficult to pinpoint.

“Given these results, it’s highly likely that the company is again expected to post a better-than-expected fourth quarter results,” said Natixis Bleichroeder analyst Roger Read.

However, BMO Capital-Canada analyst Michael Mazar believes that it might be tough for Carbo Ceramics’ fourth-quarter results to top the third-quarter performance.

“We do not expect the company to report better than this as the margins may come down with gas prices going up,” Mazar said, and expected sequentially flat fourth-quarter results.

Oilfield services companies were hit hard as oil and gas producers slashed spending this year. However, firmer oil prices have helped stabilize spending in some areas.

The company remained cautious about the demand in North America where depressed and volatile industry conditions still exist and said it saw pricing to remain competitive in the near term.

“Despite this climate, we continue to experience growing acceptance of our products by E&P (exploration and production) companies,” it said in a statement.

For the latest third quarter, the company reported a profit of $14.4 million, or 62 cents a share, compared with $18.4 million, or 75 cents a share, last year.

Revenue fell about 11 percent to $91.8 million, hurt by a decline in worldwide proppant sales volume. Analysts, on average, had expected earnings of 42 cents a share, excluding special items, on revenue of $69.39 million, according to Thomson Reuters I/B/E/S.

Shares of the Houston-based company pared some of their early gains and were up 14 percent at $58.33 in late morning trade Thursday on the New York Stock Exchange. (Reporting by Thyagaraju Adinarayan in Bangalore; Editing by Anil D’Silva and Gopakumar Warrier)

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