Monday, December 10, 2012

Carbo Ceramics ( NYSE - CRR ) -- Market Share Gains Continue

Carbo Ceramics (CRR $78.00) appears on track to produce excellent on target Q4 results.  The fourth quarter usually is seasonally slow due to the holidays.  So sequential performance may decline.  But drilling activity in the U.S. remains robust, particularly in oil regions.  And Chinese competition is continuing to abate.  Carbo has increased marketing efforts to demonstrate its technology's superiority.  Well output typically improves by 20% with the company's proppants, compared to lower priced sand or ceramic imports.  The company is continuing to focus on improving its products strength while reducing weight to provide increased price-performance characteristics.  Carbo also is developing a next generation line that could amplify its competitive advantage.  Introduction is likely inn 2013.  Our estimates are unchanged.  Faster gains are possible if natural gas drilling rebounds either due to improved economic activity or greater exports.

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