LUFKIN, Texas, April 20 --

Lufkin Industries, Inc. (Nasdaq: LUFK) today announced results for the first quarter and three months ended March 31, 2005. Net sales for the first quarter increased 47.7% to $101.4 million from $68.6 million for the first quarter of 2004. Net earnings rose 329.1% to $7.4 million for the first quarter of 2005 from $1.7 million for the first quarter last year. Net earnings per diluted share were $0.52 for the first quarter of 2005, an increase of 300.0% from $0.13 for the first quarter of 2004. Prior-period financial data reflects the two-for-one stock split effected yesterday, April 19, 2005.

"Lufkin's strong growth for the first quarter of 2005 resulted from, first, substantially increased sales in each of our three business segments," commented Douglas V. Smith, president and chief executive officer of Lufkin. "In addition, the operating environment was much improved, as the costs and supply of steel and other commodities stabilized; we successfully ramped our operations; and our product pricing began to more fully reflect the rapid cost increases we absorbed last year. This stronger environment, combined with the operating leverage produced by significant sales growth, drove our net profit margin to 7.3% of net sales for the quarter from 2.5% for the first quarter of 2004.

"Our oil field business remained Lufkin's leading growth vehicle, with net sales increasing 48.0% for the first quarter to $62.7 million. This growth primarily reflects demand for new pumping units both domestically and internationally in response to strong growth in energy demand. While a substantial majority of the pumping unit revenues are used for oil well applications, we continue to increase sales of pumping equipment used to remove water from gas wells.

"High energy demand also supported significant growth in sales of our oil field automation equipment, which is used to maximize production from existing wells. These sales combined with our increased pumping unit business produced significant growth in our service revenues, as well.

"We were also pleased with the growth in both our power transmission business, with sales up 29.7% to $22.2 million, and our trailer business, with sales up 80.2% to $16.4 million. Power transmission sales continued to benefit from growing industrial demand for low-speed gears, especially in commodity materials production and handling businesses. In addition, our sales and bookings for the first quarter included significant growth in high- speed gear projects for applications in the oil and gas and power generation industries. As expected, our power transmission repair and service revenues have grown. The increased volumes reflect the refurbishment of industrial equipment to enhance operating efficiency or to bring mothballed capacity back on line to meet increased demand. Sales for our trailer division increased substantially compared with the first quarter last year, although demand during the quarter was uneven. We believe that the sharp rise in trailer prices continues to affect the market's demand, even though the key factors that drive industry demand remain favorable.

"Lufkin's backlog increased to its highest level in over a decade, up 50.4% to $138.0 million at the end of the first quarter from $91.7 million at the same time in 2004 and up 21.8% from $113.2 million at the end of 2004. Our oil field backlog increased 70.5% to $64.3 million on a comparable-quarter basis and 4.3% sequentially. Reflecting the growth in high-speed gear bookings during the quarter, the power transmission backlog increased 100.5% to $53.1 million at the end of the first quarter from the end of the first quarter last year and 32.6% from December 31, 2004. Consistent with first quarter bookings, our trailer backlog increased 78.2% to $20.6 million from December 31, 2004, and declined 25.4% from March 31, 2004."

Based on Lufkin's stronger-than-expected financial results for the first quarter of 2005 and its backlog at the end of the quarter, the Company today increased its guidance for earnings per diluted share for 2005 to a range of $1.85 to $2.15 from a range of $1.50 to $1.75. The Company also established its guidance for earnings per diluted share for the second quarter of 2005 in a range of $0.45 to $0.55, compared with $0.25 for the second quarter of 2004.

Mr. Smith added, "Among the factors supporting our guidance for 2005, the growth in our oil field and power transmission backlogs strengthens our near- term visibility. In addition, while the operating environment and our operating leverage for the first quarter were significantly improved over 2004, we continued to be affected by inefficiencies during the quarter related to meeting increased demand, and we expect the inefficiencies will be mitigated in the quarters ahead. We will also continue to adjust our pricing so that it better reflects the true material costs that we have incurred."

Lufkin will discuss its results for the first quarter in a teleconference call today at 9:00 a.m. (central time). To listen to the call, participants should dial (913) 981-5532 approximately 10 minutes prior to the start of the call. A telephonic replay will be available from 12:00 p.m. (central time) April 20, through 7:00 p.m. (central time) April 27, 2005, by dialing (719) 457-0820 and entering reservation number 4245756.

This release contains forward-looking statements and information that are based on management's beliefs as well as assumptions made by and information currently available to management. When used in this release, the words "anticipate," "believe," "estimate," "expect" and similar expressions are intended to identify forward-looking statements. Such statements reflect the Company's current views with respect to certain events and are subject to certain assumptions, risks and uncertainties, many of which are outside the control of the Company. These risks and uncertainties include, but are not limited to, (i) oil prices, (ii) capital spending levels of oil producers, (iii) availability and prices for raw materials and (iv) general industry and economic conditions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. The Company does not intend to update these forward-looking statements and information.

Lufkin Industries, Inc. sells and services oil field pumping units, foundry castings, power transmission products and highway trailers throughout the world. The Company has vertically integrated all vital technologies required to design, manufacture and market its products.

                           LUFKIN INDUSTRIES, INC.
                             Financial Highlights
                (Thousands of dollars, except per share data)
                                 (unaudited)

                                                      Three Months Ended
                                                           March 31,

                                                      2005           2004

    Net sales                                       $101,388        $68,629
    Cost of sales                                     78,936         56,599
    Gross profit                                      22,452         12,030
    Selling, general and administrative expenses      10,757          9,334
    Operating income                                  11,695          2,696
    Interest and other income (expense), net             (70)           100
    Earnings before income taxes                      11,625          2,796
    Income tax provision                               4,185          1,062
    Net earnings                                      $7,440         $1,734

    Net earnings per share:
       Basic                                           $0.53          $0.13
       Diluted                                         $0.52          $0.13
    Weighted average shares outstanding:
       Basic                                          14,031         13,331
       Diluted                                        14,396         13,675
    Cash dividends per share                           $0.09          $0.09



                           LUFKIN INDUSTRIES, INC.
                           Balance Sheet Highlights
                            (Thousands of dollars)

                                                    March 31,    December 31,
                                                      2005           2004

    Current assets                                  $149,675       $136,336
    Total assets                                     311,911        300,269
    Current liabilities                               53,049         49,105
    Long-term debt                                        --             --
    Shareholders' equity                             216,091        208,932
    Working capital                                   96,626         87,231



                           LUFKIN INDUSTRIES, INC.
                             Division Performance
                            (Thousands of dollars)

                                                      Three Months Ended
                                                    March 31,      March 31,
                                                      2005           2004

    Revenue:
       Oil field                                     $62,721        $42,373
       Power transmission                             22,236         17,138
       Trailer                                        16,431          9,118
          Total                                     $101,388        $68,629



                                   March 31,      December 31,    March 31,
                                     2005            2004           2004
    Backlog:
       Oil field                    $64,268         $61,642       $37,686
       Power transmission            53,117          40,061        26,498
       Trailer                       20,573          11,544        27,564
          Total                    $137,958        $113,247       $91,748

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Contact:

Lufkin Industries Inc., Lufkin
R.D. Leslie, 936/637-5325