Which Oil Drilling Stocks have the Strongest Earnings Trends?

Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).

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Here’s your Cheat Sheet to how the top 5 oil drilling stocks rank via earnings trends:

Nabors Industries Ltd. (NYSE:NBR): Current Price $16.36

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 5,336 3,532 4,175 6,137 6,751
Diluted EPS ($) 1.65 -0.30 0.33 0.83 0.56

We see steady revenue growth every year at Nabors and like that EPS grew between 2009 and 2011. However, EPS slid in 2012.

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Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012 Dec. 31, 2012
Revenue ($) in millions 1,740 1,842 1,608 1,674 1,627
Diluted EPS ($) -0.35 0.46 -0.25 0.26 0.09

Quarterly results at this oil driller are showing pressure in business after revenue fell off in June 2012 and stayed there. EPS was also down substantially in the latest quarter. We’ll look elsewhere…