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McIntyre, Freedman & Flynn Investment Advisers, Inc. Latest Company News

PIONEER DRILLING     SYMBOL:  PDC

Just this morning Pioneer Drilling reported fourth quarter earnings results that were slightly better than consensus estimates, as all operations experienced significant improvement from the previous quarter.  Revenues for the fourth quarter were $203.7 million, which was a 9 percent increase from the third quarter, and a 37 percent increase from the previous year.  Earnings per share came in at $0.11 and matched Wall Street’s expectations.  Management will give guidance later on the conference call with investors however, we do not expect many surprises.

Both the drilling and production divisions saw much better operations during the quarter, and we believe the gains should be sustainable for at least the rest of the year.  Drilling service revenues rose by 9 percent, and 80 percent of their fleet is under contract.  Management also sees better pricing power and willingness of customers to extend their contract lengths.  The production division also experienced growth during the quarter which is currently 42 percent of the Company’s total revenue.  Also during 2011, the Company continued to improve its balance sheet through raising money in both the debt and equity markets.

Shares of Pioneer are not reacting much to this earnings report, and we have been disappointed with the recent performance of the stock.  We still believe that Pioneer is positioned well given the trends in the domestic energy markets.  We also think Pioneer would make a great acquisition for a much larger drilling company.  We still believe the shares will reach $15 within the next 12 months.

SUNCOR:     SYMBOL:  SU

This earnings season Suncor Energy announced fourth-quarter earnings results that were mixed, and there hasn’t been much reaction to the report in the stock market.  Earnings per share came in at $0.89, which was a couple of pennies higher than consensus estimates.  On the other hand, revenues were slightly lower than expectations, but were still about 9 percent higher than revenues from last year.  We believe the Company is one of the best-positioned energy companies in the world, and its vast assets and resources will lead to significant out-performance for years to come.

This management team has one of the best reputations in the energy sector, and 2011 turned into something of a transitional year.  The Company spent a good part of 2011 shedding non-core assets, which did lead to lower annual production volumes.  Also lower volumes in Libya, due to the civil war, led to difficult year over year comps.  Warm weather in North America has also lowered demand for heating oil and gas.  We believe that investors will see the fruits of the Company’s recent restructurings in the coming years.

Even though oil prices have remained high, the stock performances of most large energy companies have underperformed the market.  Suncor has been acting like its peers, but we believe the future of oil sands puts this Company in a better competitive position than other large conglomerates.  We believe that 2012 will be a much better year for shareholders and expect the shares to reach $45 by the end of this year.