高硫原油是比无硫原油等级更低的原油，但Graham Corp(代号:GHM)的高硫原油业务却使其获益匪浅。 Graham为原油提炼厂的建造与升级提供设备。最近此业务尤为火暴，由于提炼厂拼命加工高硫原油来满足日益膨胀的需求。
尽管高硫原油的含硫量较高，加工费用更贵，但是利用率更高，而且更便宜。随着西部德州的无硫油价格窜升，美国原油加工厂正扩大其高硫原油产量。提炼厂舍得花这笔钱，由于原油价格高企。 Singular Research的分析师表示，“如果你拥有高硫原油提炼设备，那就意味着你的收益率增加。”
市场份额
总部位于纽约州巴特维亚市的Graham占有美国原油加工产品市场75%的市场份额。今年年初，三家美国原油加工厂向Graham下了900万美圆的喷射系统定单。
Graham的年营收低于1亿美圆。但是其独特的喷射系统，真空和热传导设备适用于将各种原油分离为各种等级的原油。原油加工和石化处理是Graham的核心终端市场。原油提炼相关收入最近占总收入的大约45%，而化工处理占到1/3。 Sidoti & Co.的分析师James Bank表示，“这两个终端市场表现完美，并且还处于资本扩张阶段。石化厂不是一天就能建成的，这个工程需要数年。”
Graham表示截止于3月31日的四季度，公司获得了3500万美圆定单，相比去年同期增长29%。公司这一年业绩非常辉煌，总订单达到1.07亿美圆，去年8650万美圆。
Graham同时将类似的零件出售至原油加工，化工处理，电力等其他行业终端市场。 Graham将产品出售给工厂承包商或者工程建筑公司，比如Fluor(代号:FLR), Jacobs Engineering(代号:JEC).大部分工程产品在纽约北部生产。
有限的产量已无法满足大量需求，所以Graham转而开始产品外包。随着Graham的工厂产量增长，外包正逐渐减少。三季度外包占到9%，一季度为15%.自造产品自然意味着利润提高。
截止12月31日的三季度营收增长42.2%,至2060万美圆。收益达到0.74美圆/股，相比之前一年增长0.14美圆。原油加工和化工市场助长了公司业绩。四季度和全年营收和收益未披露。但是首席执行官James Lines在4月初表示，预计全年营收在8500-8600万美圆。去年为6600万美圆。 Lines同时预计毛利润增长30%，比之前的预期更高。 Lines表示，截止12月31日前两季度42%的毛利润增长不可能维持，由于来自于原材料和定价的压力。
业务一如既往强劲
Lines在3月27日的美国银行电话会议上预计加工市场未来2-3年内持续强劲。在化工市场，他表示未来五年25%的乙烯产量增长对公司产品而言是个积极信号。
Gear Maker Benefits As Refiners Expand To Handle Sour Crude
Heavy sour crude is a lower grade of oil than sweet crude, but it's fueling a sweet business for Graham Corp.
Graham (AMEX:GHM - News) supplies gear that goes into building or upgrading oil refineries. There's a lot of that going on these days as refiners scramble to process more sour crude to meet heavy demand.
Though sour crude, with its higher sulfur content, is costlier to process, there's more of it available. And it's cheaper.
As the price of West Texas sweet crude has soared, U.S. oil refiners have been adding capacity for sour crude.
Refiners consider the money well spent since oil prices are high and thirst continues for end products, such as transportation fuel.
"If you have the equipment to refine (sour crude), then you can increase profitability as a refiner," said Greg Garner, senior analyst with Singular Research.
Market Share
Graham, based in Batavia, N.Y., enjoys about 75% market share in the U.S. for its oil-refining products. Earlier this year, three U.S. refineries ordered $9 million in ejector systems from Graham to help process sour crude.
As oil infrastructure outfits go, Graham's a small player with annual revenue under $100 million. But its niche ejector systems, vacuum and heat exchanges are needed to separate crude oil into various grades of fuel and other petroleum-based products.
Oil refining and petrochemical processing are crucial end markets for Graham. Oil-refining-related revenue has recently made up about 45% of the total vs. about a third for chemical processing. The mix shifts some from quarter to quarter.
"Those two end markets are doing extraordinarily well and are still in a capital expansion phase," said James Bank, analyst with Sidoti & Co. "You don't build a petrochemical plant in two days. It can take years."
Graham said it pulled in a record $35 million in orders in its fiscal fourth quarter ending March 31 -- a 29% jump vs. the same time last year.
They topped off a record year, with total orders of $107 million vs. $86.5 million the prior year. Graham gets paid in steps over the course of 12 to 18 months, from the engineering stage to final delivery.
Graham sells similar kinds of components into oil refining, chemical processing, power generation and other industrial end markets.
"These are not off-the-shelf items. They are customized equipment," Garner said.
Graham sells to plant operators or engineering and construction firms such as Fluor (NYSE:FLR - News) and Jacobs Engineering (NYSE:JEC - News).
Graham makes most of its engineered products at its home factory in upstate New York. Heavy demand has caused capacity constraints, so Graham has turned to outsourcing.
As Graham has grown plant capacity, outsourcing has declined. About 9% was outsourced in the third quarter, down from 15% in the first quarter.
Margins are better when production is kept in-house. The company has been working to automate some engineering design tasks and make production tasks more efficient.
Revenue in the third fiscal quarter ending Dec. 31 rose 42.2% from the year earlier to $20.6 million. Earnings reached 74 cents a share, up from 14 cents in the prior year. Strong sales from oil refinery and the chemicals' markets fueled those results.
Fiscal fourth quarter and full-year revenue and earnings have not yet been released. But in a statement in early April, Chief Executive James Lines said to expect $85 million to $86 million in full-year revenue. That compares with $66 million in the earlier year.
Lines also forecast that gross margin would be in the upper 30% range. That forecast was up a bit from an earlier one. Lines had said that record 42% gross margins achieved in the two quarters ending Dec. 31 couldn't be sustained due to higher raw material costs and pricing pressures.
That caused the stock to pull back sharply in late January. But when the firm's outlook improved in early April, the stock jumped back.
The current expansion cycle for Graham's kind of products began in the second half of 2005. Past cycles have lasted about five years, but analysts say this one might go on longer.
Industry forecasts say chemical processing upgrades will stay strong through 2011 to 2013, Garner says. And 7.4 million barrels a day of additional refining capacity will come on line by 2012, he said, citing a forecast from OPEC.
"So there's visibility in the cycle for another three to five years before we see weakness," he said.
Business To Remain Strong
Lines told a Bank of America conference March 27 that the firm expects the refining market to stay strong the next two to three years. In the chemicals markets, he said 25% additional ethylene capacity over the next five years bodes well for the firm's products.
The question for Graham will be whether its power-generation business will kick in enough to offset future weakness in its current two key end markets, Garner says.
"The power business is weak now because it was overbuilt in the 1990s," he said. "It most likely will increase in three to five years. It will be positive for Graham, but the timing is unknown."
Meanwhile, Graham wants to keep growing business in the Middle East and Asia, including China. It has more competition in those markets, however. Its market share overseas ranges from 35% to 50%, Garner says.
Graham also is involved in refinery projects in the oil sands of Alberta, Canada.
"The best days for Graham are ahead of it, not behind it," Lines said in his Bank of America remarks. "There's going to be a strong surge for our types of products."
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