🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

ProPetro (PUMP) Q3 Earnings Miss On Soft Demand, Sales Beat

Published 11/19/2019, 08:51 PM
Updated 07/09/2023, 06:31 AM

ProPetro Holding Corp. (NYSE:PUMP) reported third-quarter net income per share of 33 cents, missing the Zacks Consensus Estimate of 48 cents and below the year-ago period's bottom-line figure of 53 cents. The underperformance stems from tepid demand for the company’s services as clients – the upstream energy players – take a cautious approach to capital spending amid depressed oil and gas prices.

ProPetro’s revenues of $541.8 million improved 24.8% year over year and came above the Zacks Consensus Estimate of $509 million, driven by impressive operating efficiency and contribution from Pioneer Natural Resources’ (NYSE:PXD) pressure pumping assets in the Permian Basin.

Adjusted EBITDA in the third quarter amounted to $131.9 million, increasing from $103.4 million a year ago.

ProPetro Holding Corp. Price, Consensus and EPS Surprise

ProPetro Holding Corp. Price, Consensus and EPS Surprise

ProPetro Holding Corp. price-consensus-eps-surprise-chart | ProPetro Holding Corp. Quote

Pressure Pumping Division

ProPetro, through its Pressure Pumping division, provides hydraulic fracturing, cementing and acidizing functions. The business accounted for 97.6% of the company's total revenues in the quarter under review.

Costs & Expenses

ProPetro reported cost of services of $396.9 million in third-quarter 2019, 24% higher than the year-ago quarter. Meanwhile, general and administrative expenses came in at $27.6 million, up from $12.8 million in the year-ago period.

Balance Sheet & Capital Expenditure

As of Sep 30, ProPetro had cash and cash equivalents of $109.2 million while its long-term debt was $130 million – for a negative net cash position. The company’s debt-to-capitalization ratio was 12.1%. ProPetro also has $64.3 million available under the revolving credit facility.Capital expenditure for the three months reached $87 million, up 17.3% compared to the third quarter of 2018. Payments toward the new-build DuraStim hydraulic fracturing fleets accounted for the rise in outlay.

Guidance & Electric Fracking Foray

ProPetro expects an average of 18-20 effective fleets in the fourth quarter, down from 25.1 in the third quarter of 2019. The fall in utilization is due to slowdown in customer spending, seasonality and a general lack of demand.

Importantly, the company is making its foray in the electric fracking technology and plans to employ one such DuraStim fleet by late 2019/early 2020 and two more subsequently in 2020. The 36,000 horsepower DuraStim fleets – boasting of fuel efficiency and lower costs – will be deployed under dedicated agreements with existing clients.

During the third quarter, ProPetro also added a unit to its cementing fleet, which brought the cementing fleet count to 23.

Zacks Rank & Stock Picks

ProPetro currently carries a Zacks Rank #5 (Strong Sell). Meanwhile, investors interested in the energy space could look at some better options like Murphy USA Inc. (NYSE:MUSA) and Phillips 66 (NYSE:PSX) that carry a Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy), respectively.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

Murphy USA Inc. (MUSA): Free Stock Analysis Report

Phillips 66 (PSX): Free Stock Analysis Report

Pioneer Natural Resources Company (PXD): Free Stock Analysis Report

ProPetro Holding Corp. (PUMP): Free Stock Analysis Report

Original post

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.