Argentina Labor Problems Hit Allis-Chalmers
Wachovia Capital Markets analyst Tom Curran says Allis-Chalmers Energy’s drilling and completion operations in Argentina are being impacted by a labor dispute between labor unions and oil companies.
“Our source said that, thus far, the strike has prevented Allis-Chalmers from driving to certain locations and delivering equipment, but did not quantify how many or to what degree rigs may be affected,” Curran said. “Allis-Chalmers does have some standby agreements in place, yet historically these havent resulted in significant, timely recoveries.”
Last week the oil and gas services company reported first-quarter earnings above Wall Street’s forecast. But Curran says the Argentina strike, which began April 30 and reduced output from 6,000 fields, could hurt the company’s profit.
“It’s one of the main reasons we’re at 28 cents (per share) for Q2 2008E versus guidance of 29 cents to 32 cents and current consensus of 30 cents,” he said.
