As service companies gear up to report second-quarter earnings, they are expected to have plenty of good news. According to Mark Urness and John Marrin, analysts with Calyon Securities (USA) Inc, aggregate second-quarter earnings are estimated to be up 13% on a sequential basis and 102% year-over-year. This comes as little surprise after a quarter of continued incessant rig activity, record-high prices, strong utilization rates and share repurchases. The analysts also expect some earnings surprises in the coming weeks from companies such as Weatherford International, Baker Hughes, Schlumberger, Grant Prideco and Cameron International. "The factors driving earnings momentum in the oil-services sector remain firmly in place, and we believe there is potential for a number of upside earnings surprises," Urness and Marrin say. "We see Weatherford as having the best opportunity to beat the consensus estimate. Baker Hughes and Schlumberger may also out perform expectations, thanks to their strong exposure to international and offshore markets. Among the midcaps, we view Grant Prideco and Cameron as most likely to exceed consensus estimates." Earnings-per-share growth is expected to increase 13% sequentially and 102% year-over-year, primarily supported by gains in the offshore segment. For more on this, see the August issue of Oil and Gas Investor. For a subscription, call 713-260-6441.