Natural Gas Services Group, Inc. reported net income of $1.4 million in the first quarter of 2010, compared to net income of $3.8 million in the same quarter of 2009. The company reported earnings of $0.11 per diluted share in the first quarter of 2010, compared to earnings of $0.31 per diluted share in the first quarter of 2009.

Natural Gas Services Group, Inc. also saw a drop in revenue on a year over year basis to $11.5 million in the first quarter of 2010, from $20 million in the same quarter last year.

Natural Gas Services Group, Inc. blamed the sharp drop in revenue on a decline in sales and rentals of natural gas compressors. These units are used by exploration and production companies to assist in the production of natural gas from wells.

The management of Natural Gas Services Group, Inc. was optimistic that business was improving. Stephen Taylor, the CEO of Natural Gas Services Group, Inc., said, “Although our first quarter results reflect the comparatively weak state of our industry, we are beginning to see some positive signs. Our rental fleet utilization has currently flattened and, albeit at a low level, we are seeing some new compressor sales orders materialize.”

Natural Gas Services Group, Inc. manufactures and sells compression equipment to the oil and gas industry and specializes in equipment used in unconventional resource basins including shale and coal bed methane. The company is headquartered in Midland, Texas and has manufacturing facilities in Oklahoma, Michigan and Texas.