|   | (X)      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES      EXCHANGE ACT OF 1934 |
|--------|-------------------------------------------------------------------------------------------------------|

|   | (  )      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES      EXCHANGE ACT OF 1934 |
|--------|-------------------------------------------------------------------------------------------------------------------|

| TEXAS                                                               | 75-0404410                                |
|---------------------------------------------------------------------|-------------------------------------------|
| (State      or other jurisdiction of incorporation or organization) | (I.R.S.      Employer Identification No.) |
|                                                                |                                      |
| 601      SOUTH RAGUET, LUFKIN, TEXAS                                | 75904                                     |
| (Address      of principal executive offices)                       | (Zip      Code)                           |

| LUFKIN      INDUSTRIES, INC.                                                     |   |
|----------------------------------------------------------------------------------|--------|
| CONDENSED      CONSOLIDATED BALANCE SHEETS (UNAUDITED)                           |   |
|                                                                             |   |
| (Thousands      of dollars, except share and per share data)                     |   |   |   |   |   |   |
|                                                                             |   | March      31, |   |   | December      31, |   |
| Assets                                                                           |   | 2009 |   |   | 2008 |   |
| Current      Assets:                                                             |   |   |   |   |   |   |
| Cash      and cash equivalents                                                   |   | $ | 92,450 |   |   | $ | 107,756 |   |
| Receivables,      net                                                            |   |   | 97,698 |   |   |   | 139,144 |   |
| Income      tax receivable                                                       |   |   | 1,368 |   |   |   | 978 |   |
| Inventories                                                                      |   |   | 143,737 |   |   |   | 128,627 |   |
| Deferred      income tax assets                                                  |   |   | 6,140 |   |   |   | 4,941 |   |
| Other      current assets                                                        |   |   | 5,442 |   |   |   | 3,674 |   |
| Current      assets from discontinued operations                                 |   |   | 645 |   |   |   | 618 |   |
| Total      current assets                                                        |   |   | 347,480 |   |   |   | 385,738 |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Property,      plant and equipment, net                                          |   |   | 137,402 |   |   |   | 130,079 |   |
| Goodwill,      net                                                               |   |   | 40,448 |   |   |   | 11,862 |   |
| Intangible      assets, net                                                      |   |   | 12,052 |   |   |   | - |   |
| Other      assets, net                                                           |   |   | 2,758 |   |   |   | 2,546 |   |
| Long-term      assets from discontinued operations                               |   |   | 493 |   |   |   | 493 |   |
| Total      assets                                                                |   | $ | 540,633 |   |   | $ | 530,718 |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Liabilities      and Shareholders' Equity                                        |   |   |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Current      liabilities:                                                        |   |   |   |   |   |   |   |   |
| Accounts      payable                                                            |   | $ | 33,956 |   |   | $ | 38,543 |   |
| Current      portion of long-term debt                                           |   |   | 1,262 |   |   |   | - |   |
| Accrued      liabilities:                                                        |   |   |   |   |   |   |   |   |
| Payroll      and benefits                                                        |   |   | 10,859 |   |   |   | 14,046 |   |
| Warranty      expenses                                                           |   |   | 3,461 |   |   |   | 3,586 |   |
| Taxes      payable                                                               |   |   | 8,038 |   |   |   | 5,894 |   |
| Other                                                                            |   |   | 28,560 |   |   |   | 25,340 |   |
| Current      liabilities from discontinued operations                            |   |   | 1,424 |   |   |   | 1,404 |   |
| Total      current liabilities                                                   |   |   | 87,560 |   |   |   | 88,813 |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Long-term      debt                                                              |   |   | 2,666 |   |   |   | - |   |
| Deferred      income tax liabilities                                             |   |   | 9,640 |   |   |   | 9,219 |   |
| Postretirement      benefits                                                     |   |   | 7,067 |   |   |   | 7,070 |   |
| Other      liabilities                                                           |   |   | 15,058 |   |   |   | 11,618 |   |
| Commitments      and contingencies                                               |   |   | - |   |   |   | - |   |
| Long-term      liabilities from discontinued operations                          |   |   | - |   |   |   | 61 |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Shareholders'      equity:                                                       |   |   |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Common      stock, $1.00 par value per share; 60,000,000 shares      authorized; |   |   |   |   |   |   |   |   |
| 15,791,963      and 15,791,963 shares issued and outstanding, respectively       |   |   | 15,792 |   |   |   | 15,792 |   |
| Capital      in excess par                                                       |   |   | 63,360 |   |   |   | 63,014 |   |
| Retained      earnings                                                           |   |   | 420,011 |   |   |   | 414,748 |   |
| Treasury      stock, 931,168 and 931,168 shares, respectively, at cost           |   |   | (34,917 | ) |   |   | (34,917 | ) |
| Accumulated      other comprehensive loss                                        |   |   | (45,604 | ) |   |   | (44,700 | ) |
| Total      shareholders' equity                                                  |   |   | 418,642 |   |   |   | 413,937 |   |
| Total      liabilities and shareholders' equity                                  |   | $ | 540,633 |   |   | $ | 530,718 |   |
|                                                                             |   |   |   |   |   |   |   |   |

| LUFKIN      INDUSTRIES, INC.                                    |   |
|-----------------------------------------------------------------|--------|
| CONDENSED      CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)  |   |
| (In      thousands of dollars, except per share and share data) |   |
|                                                            |   |   |   |   |   |   |
|                                                            |   | Three      Months Ended |   |
|                                                            |   | March      31, |   |
|                                                            |   | 2009 |   |   | 2008 |   |
|                                                            |   |   |   |   |   |   |
| Sales                                                           |   | $ | 153,138 |   |   | $ | 141,070 |   |
|                                                            |   |   |   |   |   |   |   |   |
| Cost      of Sales                                              |   |   | 118,955 |   |   |   | 100,550 |   |
|                                                            |   |   |   |   |   |   |   |   |
| Gross      Profit                                               |   |   | 34,183 |   |   |   | 40,520 |   |
|                                                            |   |   |   |   |   |   |   |   |
| Selling,      general and administrative expenses               |   |   | 18,430 |   |   |   | 16,765 |   |
| Litigation      reserve                                         |   |   | 3,000 |   |   |   | - |   |
|                                                            |   |   |   |   |   |   |   |   |
| Operating      income                                           |   |   | 12,753 |   |   |   | 23,755 |   |
|                                                            |   |   |   |   |   |   |   |   |
| Interest      income                                            |   |   | 860 |   |   |   | 679 |   |
| Interest      expense                                           |   |   | (127 | ) |   |   | (79 | ) |
| Other      expense, net                                         |   |   | (193 | ) |   |   | (382 | ) |
|                                                            |   |   |   |   |   |   |   |   |
| Earnings      from continuing operations before                 |   |   |   |   |   |   |   |   |
| income      tax provision and discontinued                      |   |   |   |   |   |   |   |   |
| operations                                                      |   |   | 13,293 |   |   |   | 23,973 |   |
|                                                            |   |   |   |   |   |   |   |   |
| Income      tax provision                                       |   |   | 4,210 |   |   |   | 8,388 |   |
|                                                            |   |   |   |   |   |   |   |   |
| Earnings      from continuing operations before                 |   |   |   |   |   |   |   |   |
| discontinued      operations                                    |   |   | 9,083 |   |   |   | 15,585 |   |
|                                                            |   |   |   |   |   |   |   |   |
| Earnings      (loss) from discontinued operations, net of tax   |   |   | (105 | ) |   |   | 44 |   |
|                                                            |   |   |   |   |   |   |   |   |
| Net      earnings                                               |   | $ | 8,978 |   |   | $ | 15,629 |   |
|                                                            |   |   |   |   |   |   |   |   |
| Basic      earnings per share:                                  |   |   |   |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |   |   |
| Earnings      from continuing operations                        |   | $ | 0.61 |   |   | $ | 1.06 |   |
| Loss      from discontinued operations                          |   |   | (0.01 | ) |   |   | - |   |
|                                                            |   |   |   |   |   |   |   |   |
| Net      earnings                                               |   | $ | 0.60 |   |   | $ | 1.06 |   |
|                                                            |   |   |   |   |   |   |   |   |
| Diluted      earnings per share:                                |   |   |   |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |   |   |
| Earnings      from continuing operations                        |   | $ | 0.61 |   |   | $ | 1.05 |   |
| Loss      from discontinued operations                          |   |   | (0.01 | ) |   |   | - |   |
|                                                            |   |   |   |   |   |   |   |   |
| Net      earnings                                               |   | $ | 0.60 |   |   | $ | 1.05 |   |
|                                                            |   |   |   |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |   |   |
| Dividends      per share                                        |   | $ | 0.25 |   |   | $ | 0.25 |   |
|                                                            |   |   |   |   |   |   |   |   |

| LUFKIN      INDUSTRIES INC.                                      |   |
|------------------------------------------------------------------|--------|
| CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |   |
| (In      thousands of dollars)                                   |   |
|                                                             |   |   |   |   |   |   |
|                                                             |   | Three      Months Ended |   |
|                                                             |   | March      31, |   |
|                                                             |   | 2009 |   |   | 2008 |   |
| Cash      flows form operating activities:                       |   |   |   |   |   |   |
| Net      earnings                                                |   | $ | 8,978 |   |   | $ | 15,629 |   |
| Adjustments      to reconcile net earnings to cash               |   |   |   |   |   |   |   |   |
| provided      by operating activities:                           |   |   |   |   |   |   |   |   |
| Depreciation      and amortization                               |   |   | 3,894 |   |   |   | 3,767 |   |
| Provision      (benefit) for losses on receivables               |   |   | (115 | ) |   |   | 8 |   |
| LIFO      expense                                                |   |   | 640 |   |   |   | 813 |   |
| Deferred      income tax benefit                                 |   |   | (1,215 | ) |   |   | (355 | ) |
| Excess      tax benefit from share-based compensation            |   |   | - |   |   |   | (411 | ) |
| Share-based      compensation expense                            |   |   | 347 |   |   |   | 964 |   |
| Pension      (income) expense                                    |   |   | 2,174 |   |   |   | (507 | ) |
| Postretirement      (benefit) obligation                         |   |   | 77 |   |   |   | (29 | ) |
| Loss      on disposition of property, plant and equipment        |   |   | 9 |   |   |   | 31 |   |
| (Income)      loss from discontinued operations                  |   |   | 105 |   |   |   | (44 | ) |
| Changes      in:                                                 |   |   |   |   |   |   |   |   |
| Receivables,      net                                            |   |   | 46,591 |   |   |   | 1,760 |   |
| Income      tax receivable                                       |   |   | (403 | ) |   |   | 553 |   |
| Inventories                                                      |   |   | (11,360 | ) |   |   | (9,633 | ) |
| Other      current assets                                        |   |   | (1,778 | ) |   |   | (1,054 | ) |
| Accounts      payable                                            |   |   | (6,395 | ) |   |   | 1,220 |   |
| Accrued      liabilities                                         |   |   | 697 |   |   |   | 3,811 |   |
| Net      cash provided by continuing operations                  |   |   | 42,246 |   |   |   | 16,523 |   |
| Net      cash provided by discontinued operations                |   |   | - |   |   |   | 23 |   |
| Net      cash provided by operating activities                   |   |   | 42,246 |   |   |   | 16,546 |   |
|                                                             |   |   |   |   |   |   |   |   |
| Cash      flows from investing activites:                        |   |   |   |   |   |   |   |   |
| Additions      to property, plant and equipment                  |   |   | (6,960 | ) |   |   | (4,882 | ) |
| Proceeds      from disposition of property, plant and equipment  |   |   | 41 |   |   |   | 69 |   |
| Increase      in other assets                                    |   |   | (98 | ) |   |   | (664 | ) |
| Acquisition      of other companies                              |   |   | (45,500 | ) |   |   | - |   |
| Net      cash used in continuing operations                      |   |   | (52,517 | ) |   |   | (5,477 | ) |
| Net      cash used in discontinued operations                    |   |   | - |   |   |   | (23 | ) |
| Net      cash used in investing activities                       |   |   | (52,517 | ) |   |   | (5,500 | ) |
|                                                             |   |   |   |   |   |   |   |   |
| Cash      flows from financing activites:                        |   |   |   |   |   |   |   |   |
| Payments      of notes payable                                   |   |   | (904 | ) |   |   | - |   |
| Dividends      paid                                              |   |   | (3,715 | ) |   |   | (3,661 | ) |
| Excess      tax benefit from share-based compensation            |   |   | - |   |   |   | 411 |   |
| Proceeds      from exercise of stock options                     |   |   | - |   |   |   | 598 |   |
| Purchases      of treasury stock                                 |   |   | - |   |   |   | (1,117 | ) |
| Net      cash used in financing activities                       |   |   | (4,619 | ) |   |   | (3,769 | ) |
|                                                             |   |   |   |   |   |   |   |   |
| Effect      of translation on cash and cash equivalents          |   |   | (416 | ) |   |   | 266 |   |
|                                                             |   |   |   |   |   |   |   |   |
| Net      increase (decrease) in cash and cash equivalents        |   |   | (15,306 | ) |   |   | 7,543 |   |
|                                                             |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents at beginning of period            |   |   | 107,756 |   |   |   | 95,748 |   |
|                                                             |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents at end of period                  |   | $ | 92,450 |   |   | $ | 103,291 |   |
|                                                             |   |   |   |   |   |   |   |   |

| Cash      paid at closing, net |   | $      | 45,500 |   |
|--------------------------------|--------|--------|--------|--------|
| Holdback      consideration    |   |   | 4,500  |   |
|                           |   |   |   |   |
| Total      consideration paid  |   | $      | 50,000 |   |
|                           |   |   |   |   |

| Purchase      price                       |   | $      | 50,000 |   |
|-------------------------------------------|--------|--------|--------|--------|
|                                      |   |   |   |   |
| Receivables                               |   |   | 4,937  |   |
| Inventories                               |   |   | 5,446  |   |
| Other      current assets                 |   |   | 715    |   |
| Property,      plant and equipment        |   |   | 5,176  |   |
| Intangible      assets                    |   |   | 12,052 |   |
| Other      long-term assets               |   |   | 141    |   |
| Accounts      payable                     |   |   | (2,243 | )      |
| Other      short-term accrued liabiltiies |   |   | (99    | )      |
| Long-term      debt                       |   |   | (4,832 | )      |
|                                      |   |   |   |   |
| Goodwill      recorded                    |   | $      | 28,707 |   |
|                                      |   |   |   |   |

|                                                  |   | Three      Months Ended |   |
|-------------------------------------------------------|--------|-------------------------|--------|
|                                                  |   | March      31,          |   |
|                                                  |   | 2009                    |   |   | 2008 |   |
|                                                  |   |                    |   |   |   |   |
| Sales                                                 |   | $                       | 35     |   |   | $ | 5,941 |   |
|                                                  |   |                    |   |   |   |   |   |   |
| Earnings      (loss) before income tax provision      |   |                    | (187   | ) |   |   | 71 |   |
|                                                  |   |                    |   |   |   |   |   |   |
| Income      tax (provision) benefit                   |   |                    | 82     |   |   |   | (27 | ) |
|                                                  |   |                    |   |   |   |   |   |   |
| Earnings      (loss) from discontinued operations,    |   |                    |   |   |   |   |   |   |
| net      of tax                                       |   | $                       | (105   | ) |   | $ | 44 |   |
|                                                  |   |                    |   |   |   |   |   |   |
|                                                  |   |                    |   |   |   |   |   |   |
|                                                  |   | March      31,          |   |   | December      31, |   |
|                                                  |   | 2009                    |   |   | 2008 |   |
|                                                  |   |                    |   |   |   |   |   |   |
| Receivables,      net                                 |   | $                       | 30     |   |   | $ | 56 |   |
| Income      tax receivable                            |   |                    | 41     |   |   |   | - |   |
| Deferred      income tax assets                       |   |                    | 574    |   |   |   | 562 |   |
| Other      current assets                             |   |                    | -      |   |   |   | - |   |
|                                                  |   |                    |   |   |   |   |   |   |
| Current      assets from discontinued operations      |   |                    | 645    |   |   |   | 618 |   |
|                                                  |   |                    |   |   |   |   |   |   |
| Property,      plant and equipment, net               |   |                    | -      |   |   |   | - |   |
| Deferred      income tax assets                       |   |                    | -      |   |   |   | - |   |
| Other      assets, net                                |   |                    | 493    |   |   |   | 493 |   |
|                                                  |   |                    |   |   |   |   |   |   |
| Long-term      assets from discontinued operations    |   |                    | 493    |   |   |   | 493 |   |
|                                                  |   |                    |   |   |   |   |   |   |
| Total      assets from discontinued operations        |   | $                       | 1,138  |   |   | $ | 1,111 |   |
|                                                  |   |                    |   |   |   |   |   |   |
|                                                  |   |                    |   |   |   |   |   |   |
| Accounts      payable                                 |   | $                       | 174    |   |   | $ | 154 |   |
| Accrued      liabilities:                             |   |                    |   |   |   |   |   |   |
| Payroll      and benefits                             |   |                    | 100    |   |   |   | 104 |   |
| Warranty      expenses                                |   |                    | 365    |   |   |   | 410 |   |
| Taxes      payable                                    |   |                    | -      |   |   |   | 120 |   |
| Other                                                 |   |                    | 785    |   |   |   | 616 |   |
|                                                  |   |                    |   |   |   |   |   |   |
| Current      liabilities from discontinued operations |   |                    | 1,424  |   |   |   | 1,404 |   |
|                                                  |   |                    |   |   |   |   |   |   |
| Long-term      liabilities                            |   |                    | -      |   |   |   | 61 |   |
|                                                  |   |                    |   |   |   |   |   |   |
| Total      liabilities from discontinued operations   |   | $                       | 1,424  |   |   | $ | 1,465 |   |
|                                                  |   |                    |   |   |   |   |   |   |

|                                            |   | March      31, |   |   | December      31, |   |
|-------------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                                            |   | 2009           |   |   | 2008              |   |
|                                            |   |           |   |   |              |   |
| Accounts      receivable                        |   | $              | 97,152 |   |              | $      | 138,706 |   |
| Notes      receivable                           |   |           | 41     |   |              |   | 157 |   |
| Other      receivables                          |   |           | 1,379  |   |              |   | 1,015 |   |
| Gross      receivables                          |   |           | 98,572 |   |              |   | 139,878 |   |
|                                            |   |           |   |   |              |   |   |   |
| Allowance      for doubtful accounts receivable |   |           | (874   | )      |              |   | (734 | ) |
| Net      receivables                            |   | $              | 97,698 |   |              | $      | 139,144 |   |
|                                            |   |           |   |   |              |   |   |   |

|                                     |   | March      31, |    |   | December      31, |   |
|------------------------------------------|--------|----------------|---------|--------|-------------------|--------|
|                                     |   | 2009           |    |   | 2008              |   |
| Gross      inventories @ FIFO:           |   |           |    |   |              |   |
| Finished      goods                      |   | $              | 6,617   |   |              | $      | 2,643 |   |
| Work      in progress                    |   |           | 30,060  |   |              |   | 28,230 |   |
| Raw      materials & component parts |   |           | 130,862 |   |              |   | 122,604 |   |
| Maintenance,      tooling & supplies |   |           | 13,638  |   |              |   | 12,611 |   |
| Total      gross inventories @ FIFO      |   |           | 181,177 |   |              |   | 166,088 |   |
| Less      reserves:                      |   |           |    |   |              |   |   |   |
| LIFO                                     |   |           | 33,566  |   |              |   | 32,926 |   |
| Valuation                                |   |           | 3,874   |   |              |   | 4,535 |   |
| Total      inventories as reported       |   | $              | 143,737 |   |              | $      | 128,627 |   |
|                                     |   |           |    |   |              |   |   |   |

|                                          |   | March      31, |     |   | December      31, |   |
|-----------------------------------------------|--------|----------------|----------|--------|-------------------|--------|
|                                          |   | 2009           |     |   | 2008              |   |
|                                          |   |           |     |   |              |   |
| Land                                          |   | $              | 8,864    |   |              | $      | 6,525 |   |
| Land      improvements                        |   |           | 10,011   |   |              |   | 10,219 |   |
| Buildings                                     |   |           | 76,474   |   |              |   | 75,756 |   |
| Machinery      and equipment                  |   |           | 251,402  |   |              |   | 245,014 |   |
| Furniture      and fixtures                   |   |           | 5,656    |   |              |   | 5,616 |   |
| Computer      equipment and software          |   |           | 14,779   |   |              |   | 14,666 |   |
| Total      property, plant and equipment      |   |           | 367,186  |   |              |   | 357,796 |   |
| Less      accumulated depreciation            |   |           | (229,784 | )      |              |   | (227,717 | ) |
| Total      property, plant and equipment, net |   | $              | 137,402  |   |              | $      | 130,079 |   |
|                                          |   |           |     |   |              |   |   |   |

|                                     |   |           |   |   | Power        |   |   |   |   |
|------------------------------------------|--------|----------------|--------|--------|--------------|--------|--------|--------|--------|
|                                     |   | Oil      Field |   |   | Transmission |   |   | Total  |   |
|                                     |   |           |   |   |         |   |   |   |   |
| Balance      as of 12/31/08              |   | $              | 9,428  |   |         | $      | 2,434  |   |   | $ | 11,862 |   |
|                                     |   |           |   |   |         |   |   |   |   |   |   |   |
| Goodwill      acquired during the period |   |           | 28,707 |   |         |   | -      |   |   |   | 28,707 |   |
| Foreign      currency translation        |   |           | (2     | )      |         |   | (119   | )      |   |   | (121 | ) |
| Balance      as of 3/31/09               |   | $              | 38,133 |   |         | $      | 2,315  |   |   | $ | 40,448 |   |
|                                     |   |           |   |   |         |   |   |   |   |   |   |   |

|                                       |   |                |   |   |         |   |   |   |   |   | Weighted     |   |
|--------------------------------------------|--------|---------------------|--------|--------|--------------|--------|--------|--------|--------|--------|--------------|--------|
|                                       |   | March      31, 2009 |   |   | Average      |   |
|                                       |   | Gross               |   |   |         |   |   |   |   |   | Amortization |   |
|                                       |   | Carrying            |   |   | Accumulated  |   |   |   |   |   | Period       |   |
|                                       |   | Amount              |   |   | Amortization |   |   | Net    |   |   | (years)      |   |
|                                       |   |                |   |   |         |   |   |   |   |   |         |   |
| Non-compete      agreements and trademarks |   | $                   | 1,004  |   |         | $      | -      |   |   | $      | 1,004        |   |   |   | 4.0 |   |
| Customer      relationships and contracts  |   |                | 11,048 |   |         |   | -      |   |   |   | 11,048       |   |   |   | 10.0 |   |
|                                       |   |                |   |   |         |   |   |   |   |   |         |   |   |   |   |   |
|                                       |   | $                   | 12,052 |   |         | $      | -      |   |   | $      | 12,052       |   |   |   | 7.0 |   |
|                                       |   |                |   |   |         |   |   |   |   |   |         |   |   |   |   |   |

|                                       |   |                   |   |   |         |   |   |   |   |   | Weighted     |   |
|--------------------------------------------|--------|------------------------|--------|--------|--------------|--------|--------|--------|--------|--------|--------------|--------|
|                                       |   | December      31, 2008 |   |   | Average      |   |
|                                       |   | Gross                  |   |   |         |   |   |   |   |   | Amortization |   |
|                                       |   | Carrying               |   |   | Accumulated  |   |   |   |   |   | Period       |   |
|                                       |   | Amount                 |   |   | Amortization |   |   | Net    |   |   | (years)      |   |
|                                       |   |                   |   |   |         |   |   |   |   |   |         |   |
| Non-compete      agreements and trademarks |   | $                      | -      |   |         | $      | -      |   |   | $      | -            |   |   |   | - |   |
| Customer      relationships and contracts  |   |                   | -      |   |         |   | -      |   |   |   | -            |   |   |   | - |   |
|                                       |   |                   |   |   |         |   |   |   |   |   |         |   |   |   |   |   |
|                                       |   | $                      | -      |   |         | $      | -      |   |   | $      | -            |   |   |   | - |   |
|                                       |   |                   |   |   |         |   |   |   |   |   |         |   |   |   |   |   |

|                                       |   |   |   |   | Weighted     |   |
|--------------------------------------------|--------|--------|--------|--------|--------------|--------|
|                                       |   |   |   |   | Average      |   |
|                                       |   |   |   |   | Amortization |   |
|                                       |   |   |   |   | Period       |   |
|                                       |   | Amount |   |   | (years)      |   |
|                                       |   |   |   |   |         |   |
| Non-compete      agreements and trademarks |   | $      | 1,004  |   |         |   | 4.0 |   |
| Customer      relationships and contracts  |   |   | 11,048 |   |         |   | 10.0 |   |
|                                       |   |   |   |   |         |   |   |   |
|                                       |   | $      | 12,052 |   |         |   | 7.0 |   |
|                                       |   |   |   |   |         |   |   |   |

| For      the year ended 12/31/09 |   | $      | 1,128 |   |
|----------------------------------|--------|--------|-------|--------|
| For      the year ended 12/31/10 |   |   | 1,353 |   |
| For      the year ended 12/31/11 |   |   | 1,353 |   |
| For      the year ended 12/31/12 |   |   | 1,254 |   |
| For      the year ended 12/31/13 |   |   | 1,234 |   |
| For      the year ended 12/31/14 |   |   | 1,126 |   |
| Thereafter                       |   |   | 4,604 |   |

|                                         |   | March      31, |   |   | December      31, |   |
|----------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                                         |   | 2009           |   |   | 2008              |   |
|                                         |   |           |   |   |              |   |
| Customer      prepayments                    |   | $              | 11,182 |   |              | $      | 12,925 |   |
| Litigation      reserves                     |   |           | 9,000  |   |              |   | 6,000 |   |
| Deferred      compensation plans             |   |           | 4,322  |   |              |   | 4,046 |   |
| Accrued      professional services           |   |           | 636    |   |              |   | 1,097 |   |
| Hold      back consideration                 |   |           | 1,515  |   |              |   | - |   |
| Other      accrued liabilities               |   |           | 1,905  |   |              |   | 1,272 |   |
| Total      other current accrued liabilities |   | $              | 28,560 |   |              | $      | 25,340 |   |
|                                         |   |           |   |   |              |   |   |   |

|                                        |   | March      31, |   |   | December      31, |   |
|---------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                                        |   | 2009           |   |   | 2008              |   |
|                                        |   |           |   |   |              |   |
| Long-term      notes payable                |   | $              | 3,928  |   |              | $      | - |   |
|                                        |   |           |   |   |              |   |   |   |
| Less      current portion of long-term debt |   |           | (1,262 | )      |              |   | - |   |
|                                        |   |           |   |   |              |   |   |   |
| Long-term      debt                         |   | $              | 2,666  |   |              | $      | - |   |
|                                        |   |           |   |   |              |   |   |   |

| 2010       |   | $      | 1,406  |   |
|------------|--------|--------|--------|--------|
| 2011       |   |   | 1,194  |   |
| 2012       |   |   | 66     |   |
| Thereafter |   |   | -      |   |
|       |   |   |   |   |
|       |   | $      | 2,666  |   |
|       |   |   |   |   |

|                                               |   | Pension      Benefits |   |   | Other      Benefits |   |
|----------------------------------------------------|--------|-----------------------|--------|--------|---------------------|--------|
| Three      Months Ended March 31,                  |   | 2009                  |   |   | 2008                |   |   | 2009 |   |   | 2008 |   |
|                                               |   |                  |   |   |                |   |   |   |   |   |   |   |
| Service      cost                                  |   | $                     | 1,156  |   |                | $      | 1,237 |   |   | $ | 40 |   |   | $ | 46 |   |
| Interest      cost                                 |   |                  | 2,823  |   |                |   | 2,650 |   |   |   | 108 |   |   |   | 109 |   |
| Expected      return on plan assets                |   |                  | (3,111 | )      |                |   | (4,257 | ) |   |   | - |   |   |   | - |   |
| Amortization      of prior service cost            |   |                  | 225    |   |                |   | 141 |   |   |   | - |   |   |   | - |   |
| Amortization      of unrecognized net (gain) loss  |   |                  | 1,257  |   |                |   | 21 |   |   |   | (43 | ) |   |   | (46 | ) |
| Amortization      of unrecognized transition asset |   |                  | -      |   |                |   | (160 | ) |   |   | - |   |   |   | - |   |
| Net      periodic benefit cost (income)            |   | $                     | 2,350  |   |                | $      | (368 | ) |   | $ | 105 |   |   | $ | 109 |   |
|                                               |   |                  |   |   |                |   |   |   |   |   |   |   |   |   |   |   |

|                                                     |   | Three      Months Ended |   |
|----------------------------------------------------------|--------|-------------------------|--------|
|                                                     |   | March      31           |   |
|                                                     |   | 2009                    |   |   | 2008 |   |
|                                                     |   |                    |   |   |   |   |
| Net      earnings                                        |   | $                       | 8,978  |   |   | $ | 15,629 |   |
|                                                     |   |                    |   |   |   |   |   |   |
| Other      comprehensive income, before tax:             |   |                    |   |   |   |   |   |   |
|                                                     |   |                    |   |   |   |   |   |   |
| Foreign      currency translation adjustments            |   |                    | (1,811 | ) |   |   | 892 |   |
|                                                     |   |                    |   |   |   |   |   |   |
| Defined      benefit pension plans:                      |   |                    |   |   |   |   |   |   |
|                                                     |   |                    |   |   |   |   |   |   |
| Amortization      of prior service cost included         |   |                    |   |   |   |   |   |   |
| in      net periodic benefit cost                        |   |                    | 225    |   |   |   | 141 |   |
| Amortization      of unrecognized transition             |   |                    |   |   |   |   |   |   |
| asset      included in net periodic benefit cost         |   |                    | -      |   |   |   | (160 | ) |
| Amortization      of unrecognized net loss               |   |                    |   |   |   |   |   |   |
| included      in net periodic benefit cost               |   |                    | 1,257  |   |   |   | 21 |   |
|                                                     |   |                    |   |   |   |   |   |   |
| Total      defined benefit pension plans                 |   |                    | 1,482  |   |   |   | 2 |   |
|                                                     |   |                    |   |   |   |   |   |   |
| Defined      benefit postretirement plans:               |   |                    |   |   |   |   |   |   |
|                                                     |   |                    |   |   |   |   |   |   |
| Amortization      of unrecognized net gain               |   |                    |   |   |   |   |   |   |
| included      in net periodic benefit cost               |   |                    | (43    | ) |   |   | (46 | ) |
|                                                     |   |                    |   |   |   |   |   |   |
| Total      defined benefit postretirement plans          |   |                    | (43    | ) |   |   | (46 | ) |
|                                                     |   |                    |   |   |   |   |   |   |
| Total      other comprehensive income (loss), before tax |   |                    | (372   | ) |   |   | 848 |   |
|                                                     |   |                    |   |   |   |   |   |   |
| Income      tax benefit related to items of other        |   |                    |   |   |   |   |   |   |
| comprehensive      income                                |   |                    | (532   | ) |   |   | 16 |   |
|                                                     |   |                    |   |   |   |   |   |   |
| Total      other comprehensive income (loss), net of tax |   |                    | (904   | ) |   |   | 864 |   |
|                                                     |   |                    |   |   |   |   |   |   |
| Total      comprehensive income                          |   | $                       | 8,074  |   |   | $ | 16,493 |   |
|                                                     |   |                    |   |   |   |   |   |   |

|                         |   |        |   |   | Defined |    |    | Defined        |   |    | Accumulated   |   |
|------------------------------|--------|-------------|--------|--------|---------|---------|---------|----------------|--------|---------|---------------|--------|
|                         |   | Foreign     |   |   | Benefit |    |    | Benefit        |   |    | Other         |   |
|                         |   | Currency    |   |   | Pension |    |    | Postretirement |   |    | Comprehensive |   |
|                         |   | Translation |   |   | Plans   |    |    | Plans          |   |    | Loss          |   |
|                         |   |        |   |   |    |    |    |           |   |    |          |   |
| Balance,      Dec. 31, 2008  |   | $           | 2,512  |   |    | $       | (48,921 | )              |   | $       | 1,709         |   |   | $ | (44,700 | ) |
|                         |   |        |   |   |    |    |    |           |   |    |          |   |   |   |   |   |
| Current-period      change   |   |        | (1,811 | )      |    |    | 934     |           |   |    | (27           | )      |   |   | (904 | ) |
|                         |   |        |   |   |    |    |    |           |   |    |          |   |   |   |   |   |
| Balance,      March 31, 2009 |   | $      | 701    |   |    | $  | (47,987 | )              |   | $  | 1,682         |   |   | $  | (45,604 | ) |
|                         |   |        |   |   |    |    |    |           |   |    |          |   |   |   |   |   |

|                                               |   | Three      Months Ended |       |
|----------------------------------------------------|--------|-------------------------|------------|
|                                               |   | March      31,          |       |
|                                               |   | 2009                    |       |   | 2008 |   |
| Weighted      average common shares outstanding    |   |                    |       |   |   |   |
| for      basic EPS                                 |   |                    | 14,860,795 |   |   |   | 14,642,174 |   |
| Effect      of dilutive securities: employee stock |   |                    |       |   |   |   |   |   |
| options                                            |   |                    | 32,797     |   |   |   | 147,361 |   |
| Adjusted      weighted average common shares       |   |                    |       |   |   |   |   |   |
| outstanding      for diluted EPS                   |   |                    | 14,893,592 |   |   |   | 14,789,535 |   |
|                                               |   |                    |       |   |   |   |   |   |

|                                              |   | Three      Months Ended |   |
|---------------------------------------------------|--------|-------------------------|--------|
|                                              |   | March      31,          |   |
|                                              |   | 2009                    |   |   | 2008 |   |
|                                              |   |                    |   |   |   |   |
| Stock-based      compensation expense             |   | $                       | 346    |   |   | $ | 964 |   |
| Tax      benefit                                  |   |                    | (128   | ) |   |   | (357 | ) |
| Stock-based      compensation expense, net of tax |   | $                       | 218    |   |   | $ | 607 |   |
|                                              |   |                    |   |   |   |   |   |   |

|                                                     |   | 2009             |              |   | 2008             |   |
|----------------------------------------------------------|--------|------------------|-------------------|--------|------------------|--------|
|                                                     |   |             |              |   |             |   |
| Expected      dividend yield                             |   |             | 2.8               | %      |             |   | 1.7 | % |
| Expected      stock price volatility                     |   |             | 46.8%      - 54.0 | %      |             |   | 41.0%      - 46.0 | % |
| Risk      free interest rate                             |   |             | 1.09%      - 2.23 | %      |             |   | 1.90%      - 3.00 | % |
| Expected      life options                               |   | 3 -      7 years |              |   | 2 -      6 years |   |
| Weighted-average      fair value per share at grant date |   | $                | 13.08             |   |             | $      | 18.14 |   |

|                                |   |   |    |   |      |   |   | Weighted-   |   |   |      |   |
|-------------------------------------|--------|--------|---------|--------|-----------|--------|--------|-------------|--------|--------|-----------|--------|
|                                |   |   |    |   | Weighted- |   |   | Average     |   |   | Aggregate |   |
|                                |   |   |    |   | Average   |   |   | Remaining   |   |   | Intrinsic |   |
|                                |   |   |    |   | Exercise  |   |   | Contractual |   |   | Value     |   |
| Options                             |   | Shares |    |   | Price     |   |   | Term        |   |   | ($000's)  |   |
|                                |   |   |    |   |      |   |   |        |   |   |      |   |
| Outstanding      at January 1, 2009 |   |   | 548,639 |   |      | $      | 51.42  |        |   |   |      |   |   |   |
| Granted                             |   |   | 37,500  |   |      |   | 36.06  |        |   |   |      |   |   |   |
| Exercised                           |   |   | -       |   |      |   | -      |        |   |   |      |   |   |   |
| Forfeited      or expired           |   |   | -       |   |      |   | -      |        |   |   |      |   |   |   |
| Outstanding      at March 31, 2009  |   |   | 586,139 |   |      | $      | 50.44  |        |   |   | 7.9       |   |   | $ | 1,812 |   |
| Exercisable      at March 31, 2009  |   |   | 307,659 |   |      | $      | 47.62  |        |   |   | 7.1       |   |   | $ | 1,744 |   |
|                                |   |   |    |   |      |   |   |        |   |   |      |   |   |   |   |   |

| (Thousands      of dollars)                            |   |   |   |
|--------------------------------------------------------|--------|--------|--------|
|                                                   |   |   |   |
| Balance      at December 31, 2008                      |   | $      | 1,368  |   |
|                                                   |   |   |   |   |
| Gross      increases- current year tax positions       |   |   | 216    |   |
| Gross      increases- tax positions from prior periods |   |   | 45     |   |
| Gross      decreases- tax positions from prior periods |   |   | (261   | ) |
| Settlements                                            |   |   | (173   | ) |
|                                                   |   |   |   |   |
| Balance      at March 31, 2009                         |   | $      | 1,195  |   |
|                                                   |   |   |   |   |

| Three Months Ended March 31,      2009   |   |
|------------------------------------------|--------|
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |   |   |   | Power |   |   | Corporate |   |   |   |   |   |   |   |
|                                     |   | Oil      Field |   |   | Transmission |   |   | &      Other* |   |   | Adjustment** |   |   | Total |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross      sales                         |   | $ | 113,014 |   |   | $ | 42,340 |   |   | $ | - |   |   | $ | - |   |   | $ | 155,354 |   |
| Inter-segment      sales                 |   |   | (1,331 | ) |   |   | (885 | ) |   |   | - |   |   |   | - |   |   |   | (2,216 | ) |
| Net      sales                           |   | $ | 111,683 |   |   | $ | 41,455 |   |   | $ | - |   |   | $ | - |   |   | $ | 153,138 |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income                    |   | $ | 12,111 |   |   | $ | 3,642 |   |   | $ | (3,000 | ) |   | $ | - |   |   | $ | 12,753 |   |
| Other      income (expense), net         |   |   | (295 | ) |   |   | 108 |   |   |   | 727 |   |   |   | - |   |   |   | 540 |   |
| Earnings      from continuing operations |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| before      income tax provision         |   | $ | 11,816 |   |   | $ | 3,750 |   |   | $ | (2,273 | ) |   | $ | - |   |   | $ | 13,293 |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Three Months Ended March 31,      2008          |   |
|-------------------------------------------------|--------|
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                            |   |   |   |   | Power |   |   | Corporate |   |   |   |   |   |   |   |
|                                            |   | Oil      Field |   |   | Transmission |   |   | &      Other* |   |   | Adjustment** |   |   | Total |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross      sales                                |   | $ | 101,500 |   |   | $ | 40,595 |   |   | $ | - |   |   | $ | - |   |   | $ | 142,095 |   |
| Inter-segment      sales                        |   |   | (591 | ) |   |   | (434 | ) |   |   | - |   |   |   | - |   |   |   | (1,025 | ) |
| Net      sales                                  |   | $ | 100,909 |   |   | $ | 40,161 |   |   | $ | - |   |   | $ | - |   |   | $ | 141,070 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income (loss)                    |   | $ | 20,531 |   |   | $ | 4,795 |   |   | $ | - |   |   | $ | (1,571 | ) |   | $ | 23,755 |   |
| Other      income (expense), net                |   |   | (268 | ) |   |   | (62 | ) |   |   | 548 |   |   |   | - |   |   |   | 218 |   |
| Earnings      (loss) from continuing operations |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| before      income tax provision                |   | $ | 20,263 |   |   | $ | 4,733 |   |   | $ | 548 |   |   | $ | (1,571 | ) |   | $ | 23,973 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                    |   | Three      Months Ended |    |   |      |   |    |             |   |
|-------------------------|--------|-------------------------|---------|--------|-----------|--------|---------|------------------|--------|
|                    |   | March      31,          |    |   | Increase/ |   |    | %      Increase/ |   |
|                    |   | 2009                    |    |   | 2008      |   |    | (Decrease)       |   |   | (Decrease) |   |
| Sales                   |   |                    |    |   |      |   |    |             |   |   |   |   |
| Oil      Field          |   | $                       | 111,683 |   |      | $      | 100,909 |             |   | $ | 10,774 |   |   |   | 10.7 |   |
| Power      Transmission |   |                    | 41,455  |   |      |   | 40,161  |             |   |   | 1,294 |   |   |   | 3.2 |   |
| Total                   |   | $                       | 153,138 |   |      | $      | 141,070 |             |   | $ | 12,068 |   |   |   | 8.6 |   |
|                    |   |                    |    |   |      |   |    |             |   |   |   |   |   |   |   |   |
| Gross Profit            |   |                    |    |   |      |   |    |             |   |   |   |   |   |   |   |   |
| Oil      Field          |   | $                       | 23,329  |   |      | $      | 28,230  |             |   | $ | (4,901 | ) |   |   | (17.4 | ) |
| Power      Transmission |   |                    | 10,854  |   |      |   | 12,188  |             |   |   | (1,334 | ) |   |   | (10.9 | ) |
| Adjustment*             |   |                    | -       |   |      |   | 102     |             |   |   | (102 | ) |   |   | (100.0 | ) |
| Total                   |   | $                       | 34,183  |   |      | $      | 40,520  |             |   | $ | (6,337 | ) |   |   | (15.6 | ) |
|                    |   |                    |    |   |      |   |    |             |   |   |   |   |   |   |   |   |

| l       | The      customer has accepted title and risk of loss;                                                                                                                                                              |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| l       | The      customer has provided a written purchase order for the      product;                                                                                                                                       |
| l  | The      customer, not the Company, requested the product to be stored and to be      invoiced under a Bill-and-Hold arrangement. The customer must also provide      the business purpose for the storage request; |
| l       | The      customer must provide a storage period and future shipping      date;                                                                                                                                      |
| l       | The      Company must not have retained any future performance obligations on the      product;                                                                                                                     |
| l       | The      Company must segregate the stored product and not make it available to use      on other orders; and                                                                                                       |
| l       | The      product must be completed and ready for  shipment.                                                                                                                                                         |

| l       | oil      price volatility;                                                                                                                                                                                                                                                                     |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| l       | declines      in domestic and worldwide oil and gas drilling;                                                                                                                                                                                                                                  |
| l       | capital      spending levels of oil producers;                                                                                                                                                                                                                                                 |
| l       | availability      and prices for raw materials;                                                                                                                                                                                                                                                |
| l       | the      inherent dangers and complexities of our operations;                                                                                                                                                                                                                                  |
| l       | uninsured      judgments or a rise in insurance premiums;                                                                                                                                                                                                                                      |
| l       | the      inability to effectively integrate acquisitions;                                                                                                                                                                                                                                      |
| l       | labor      disruptions and increasing labor costs;                                                                                                                                                                                                                                             |
| l       | the      availability of qualified and skilled labor;                                                                                                                                                                                                                                          |
| l       | disruption      of our operating facilities or management information    systems;                                                                                                                                                                                                              |
| l  | the      impact on foreign operations of war, political disruption, civil      disturbance, economic and legal sanctions and changes in global trade      policies;                                                                                                                            |
| l       | currency      exchange rate fluctuations in the markets in which the Company      operates;                                                                                                                                                                                                    |
| l  | changes      in the laws, regulations, policies or other activities of governments,      agencies and similar organizations where such actions may affect the      production, licensing, distribution or sale of the Company’s products, the      cost thereof or applicable tax rates; |
| l       | costs      related to legal and administrative proceedings, including adverse      judgments against the Company if the Company fails to prevail in reversing      such judgments; and                                                                                                         |
| l  | general      industry, political and economic conditions in the markets where the      Company procures material, components and supplies for the production of      the Company’s principal products or where the Company’s products are      produced, distributed or sold.      |

| **10.1 |   | Lufkin      Industries, Inc. 2009 Variable Compensation Plan, included as Exhibit 10.1      to Form 8-K filed February 17, 2009 (file No. 0-02612), which exhibit is      incorporated herein by reference. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                        |
| *31.1  |   | Rule      13a-14(a)/15d-14(a) Certification of Chief Executive    Officer.                                                                                                                                  |
|   |   |                                                                                                                                                                                                        |
| *31.2  |   | Rule      13a-14(a)/15d-14(a) Certification of Chief Financial    Officer.                                                                                                                                  |
|   |   |                                                                                                                                                                                                        |
| *32.1  |   | Section      1350 Certification of Chief Executive Officer.                                                                                                                                                 |
|   |   |                                                                                                                                                                                                        |
| *32.2  |   | Section      1350 Certification of Chief FinancialOfficer.                                                                                                                                                  |

| Exhibit      Number | Description |
|---------------------|-------------|
|                |        |   |
| **10.1              |        | Lufkin      Industries, Inc. 2009 Variable Compensation Plan, included as Exhibit 10.1      to Form 8-K filed February 17, 2009 (file No. 0-02612), which exhibit is      incorporated herein by reference. |
|                |        |   |
| *31.1               |        | Rule      13a-14(a)/15d-14(a) Certification of Chief Executive    Officer. |
|                |        |   |
| *31.2               |        | Rule      13a-14(a)/15d-14(a) Certification of Chief Financial    Officer. |
|                |        |   |
| *32.1               |        | Section      1350 Certification of Chief Executive Officer. |
|                |        |   |
| *32.2               |        | Section      1350 Certification of Chief FinancialOfficer. |