As investors have seen this week with Transfield Services Limited (ASX: TSE) and Monadelphous Group Limited (ASX: MND) both jumping around 17%, stocks exposed to the mining services sector are primed to head higher from their depressed levels on any news deemed by investors as positive. This appears to have been the case on Wednesday for engineering contractor Worleyparsons Limited (ASX: WOR), whose shares rallied 10.6% after the release of its interim earnings result.
Like most businesses exposed to the mining services industry, WorleyParsons hasn't been immune to the sector wide sell-off and over the past 12 months the stock is still down 36% despite yesterday's rally.
In other words the stock is still a long way from its 52-week high.
WorleyParsons announced underlying earnings per share (EPS) of 40.6 cents per share (cps) for the half and declared an interim dividend of 34 cps. Management reaffirmed guidance which suggests the company is on track to earn (at the mid-point) around 113 cps for the full year.
Foolish takeaway
On the above numbers WorleyParsons is trading on a FY 2014 price-to-earnings ratio of 15.2. According to Thomson Consensus Estimates, analysts are forecasting EPS of 136.1 cps in FY 2015 and 150.8 cps in FY2016. If the half-year results give investors' confidence that these forecasts are indeed achievable, then it's quite possible the share price could continue to trend higher from here.
