Large Cap Watch List (Track at Marketocracy) member Superior Energy Services, Inc. (SPN) today announced record net income of $70.1 million and diluted earnings per share of $0.85 on revenues of $396.8 million, as compared to analyst estimates of $0.80 on $377 million in revenue.

The company managed the growth without adding too significantly to the balance sheet. This suggests that cash flow from operations likely improved significantly, as did return on capital measures. Despite these improvements, however, the stock has stayed relatively flat for several months.

With a single-digit forward P/E multiple, I wouldn’t expect that to last much longer.

Large Cap Watch List (Track at Marketocracy) member Superior Energy reported earnings:

Superior Energy Services, Inc. (NYSE: SPN) today announced record net income of $64.0 million and diluted earnings per share of $0.78 on revenues of $362.9 million, as compared to net income of $32.2 million, or $0.40 diluted earnings per share on revenues of $222.5 million for the first quarter of 2006. The results also compare favorably to the fourth quarter of 2006, in which net income was $62.2 million and diluted earnings per share was $0.76, on revenues of $319.1 million.

Analysts had been expecting the company to earn $0.75 on $346 million in revenue, suggesting that the Board of Directors has earned its raise.  No guidance was provided in the press release, but the company is hosting a conference call today at 11:00 AM Eastern time.

Superior Energy Services (SPN) issued the following statement in an 8K filing:

On April 11, 2007, the Board of Directors of Superior Energy Services, Inc., upon recommendation of its Nominating and Corporate Governance Committee, approved increases in the cash and equity compensation payable to non-management directors. The Nominating and Corporate Governance Committee received input from an independent compensation consultant in order to ensure that non-management director compensation reflected current competitive market conditions.Effective May 1, 2007, the amount of the annual retainer for non-management directors will be increased from $30,000 to $40,000 per year. In addition, the dollar amount of restricted stock units awarded to non-management directors following the 2007 annual meeting of stockholders will be increased to $140,000 from $100,000 awarded in 2006.

That sounded awfully generous to us, but looking through the recent proxies for other small- and mid- size oil and oil services companies on our watch lists it looks pretty much in line, if not at the low end.

If there are any such companies in need of a new director, we hereby offer our services.

Disclosure: Author is long UNITED STS OIL FD LP UNITS (USO) at time of publication.

We have generally been bullish on energy, and that enthusiasm extends to Large Cap Watch List (Track at Marketocracy) member Superior Energy Services (SPN) which today announced:

Superior Energy Services, Inc. announced today that it has acquired Advanced Oilwell Services, Inc. for $24.1 million in cash. Additionally, the agreement includes a potential earnout payment of $6.0 million if Advanced Oilwell Services achieves certain financial objectives….Kenneth L. Blanchard, Superior’s President and Chief Operating Officer, stated, “This acquisition, which is expected to be accretive to earnings in 2007, fits in nicely with our desire to expand our market share in pumping and stimulation services. Advanced Oilfield Services positions us well in the East Texas market and creates a platform for future expansion into South Texas and beyond. The acquisition also provides Superior with pressure pumping package fabrication capacity for both internal use and external sale. Finally, we feel fortunate to be welcoming such an experienced management group to the Superior team.”

$24 million is a fairly bite-sized acquisition for Superior, which has an enterprise value of $3.5 billion. However, given that sales have doubled over the last two years and net income is up more than five-fold, it is no surprise the company is investing all of its cash back into its core business. For a company growing this fast to sport a price/earnings multiple that barely cracks double digits is one of the reasons for our aforementioned bullishness.

With the end of the first quarter approaching, it is time to adjust the names in our Watch Lists. We will price all the new lists as of the close on Friday, March 30. Today we present our planned updates to the Large Cap Watch List (Track at Marketocracy).

Though less than the Small Cap Watch List and Mid Cap Watch List (Track at Marketocracy), there was still relatively high turnover in this list. 14 of the original 33 names made the cut for the new list (which was trimmed to just 26 names.) Part of the reason for the turnover was to reduce overlap between the lists. One third of the Mid Cap Watch List (Track at Marketocracy) names appear on each of the Small Cap and Large Cap Watch List (Track at Marketocracy)s, but there is no longer any overlap between small and large.
So without further ado, the names on the chopping block from the previous list are:

3M (MMM); Continental (CTTAY.PK); Mitsui (MITSY); Anheuser-Busch (BUD); ConocoPhillips (COP); Helix Energy (HELX); IndyMac Bancorp (NDE - Annual Report); Barr Pharmaceutical (BRL - Annual Report); Quest Diagnostics (DGX); Public Storage (PSA); ITT Educational Services (ESI); Equifax (EFX); Rent-a-Center (RCII); Kroger (KR); Ricoh (RICOY); First Data Corp. (FDC); Expeditors International (EXPD); and Keyspan (KSE).

The new list is: