Market Overview

Earnings Preview For Layne Christensen (LAYN)

Layne Christensen (NASDAQ: LAYN) will be reporting 2011 fiscal fourth-quarter earnings before the bell tomorrow. Analysts are expecting the company to earn $0.36 per share, which would represent a 28% growth over last year's figure of $0.28 per share. Sales are expected to come in at $254.39 million, which would be 12% more than last year. Over the past 90 days, this quarter's estimate has increased by $0.02.

The company provides drilling and construction services and related products to the water infrastructure and mineral exploration markets. This market has been hot due to the robust global economy and the stock is trading near its 52-week high of $36.92. LAYN is thinly traded with only 77,000 shares traded daily, so news events such as earnings can produce outsized moves in the stock. The stock's market capitalization is $691 million.

The stock is currently trading at 24.8x current-year estimates of $1.42 per share. This certainly is not a cheap valuation, but investors have high hopes for this company and have been handsomely rewarded since the market began its strong rally last August. Expectations are high for this earnings report, given the fact that the company has posted double-digit positive surprises in each of the past four quarters. It will likely take at least $1.50 in earnings to move the stock higher from these levels.

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