Category: PUMP

PUMP – ProPetro (PUMP) Stock Down 11.8% Since Wider Loss Posted for Q2

Shares of ProPetro Holding Corp. (PUMP Free Report) have dropped 11.8% since the company’s second-quarter 2021 earnings announcement on Aug 3.

This southbound stock movement is induced by a wider-than-anticipated loss reported for the second quarter as well as higher service cost resulting from increased levels of activity and inflationary effects from other direct expenditures.

Insight Into the Earnings Report

ProPetro reported second-quarter adjusted net loss of 8 cents per share, wider than the Zacks Consensus Estimate of a loss of 6 cents. This underperformance was due to escalated service costs.

However, the bottom line narrowed from the year-ago quarter’s loss of 26 cents per share attributable to better-than-expected revenue contribution from the Pressure Pumping unit. The segment reported revenues of $213.5 million, outpacing the consensus mark of $200 million.

Quarterly revenues of $216.89 million outpaced the Zacks Consensus Estimate of $203 million and also increased from the year-ago quarter’s $106.11 million.

This oilfield service provider’s adjusted EBITDA in the second quarter amounted to $36 million, up from $25.4 million in the year-ago quarter. Full-quarter contributions from fleet reactivation during the first quarter of this year led to the increase in Adjusted EBITDA.

ProPetro’s adjusted EBITDA of $46.83 million in its Pressure Pumping unit during the June quarter surpassed the Zacks Consensus Estimate of $46.36 million. Investors should know that pressure pumping is the main contributor to the company’s earnings.

Pressure Pumping Division

The Midland, TX-based company provides hydraulic fracturing, cementing and acidizing functions through the Pressure Pumping segment. The business contributed 98.4% to the company’s total revenues in the quarter under review. Service revenues soared 105.6% from the prior-year quarter’s levels to $213.5 million, attributable to higher fleet strength and a stable operating environment following the first-quarter weather woes.

Costs & Expenses

ProPetro reported service cost of $162.8 million for the second quarter, up 138.7% from the year-ago quarter’s level. General and administrative expenses were $17.53 million, down 13.6% from $20.3 million in the prior-year quarter.

Balance Sheet & Capital Expenditures

As of Jun 30, 2021, ProPetro had cash and cash equivalents worth $72.7 million and did not incur any long-term debt. It also had $68 million under its revolving credit facility. Capital expenditures in the June quarter of 2021 summed $31 million, up 160.5% from the second-quarter 2020 level.

Guidance

ProPetro expects full-year capital expenditures in the $115-$130 million range, based on its current and expected activity levels. It allocated approximately $37 million to its Tier IV DGB dual-fuel equipment investment of 90,000 HHP while the rest constitutes maintenance spending, mainly.

ProPetro CEO Phillip Gobe said, “Our commitment to our employees, customers and stakeholders will continue to bolster the value proposition for our company. We believe, the pressure pumping industry is faced with an impending reinvestment cycle that will require innovative solutions to meet the needs of the market. We believe, ProPetro’s focused business model, commitment to innovation, capital discipline and conservative capital structure will result in a sustainable company going forward that is well positioned for the future.”

Zacks Rank & Stocks to Consider

ProPetro has a Zacks Rank #3 (Hold), currently. Some better-ranked stocks in the  energy  space are Matador Resources Company (MTDR Free Report) , Devon Energy Corporation (DVN Free Report) and Continental Resources, Inc. (CLR Free Report) , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PUMP – ProPetro's (PUMP) Q4 Loss Narower Than Expected, Sales Miss

ProPetro Holding Corp. (

However, the bottom line compared unfavorably with the year-ago quarter’s earnings of 25 cents. The underperformance reflects higher year-over-year impairment expense and lower activity levels, with effective utilization for the period at 9.6 fleets, falling sharply from the year-ago quarter’s 19.2.        

Quarterly revenues of $154 million missed the Zacks Consensus Estimate sales of $155 million and declined more than 64.5% from the year-ago quarter.

The oilfield service provider’s pressure pumping revenues of $151.4 million outpaced the consensus mark of $146 million. However, the same declined 64.5% year over year. Adjusted EBITDA in the fourth quarter amounted to $24 million, down from $110.3 million in the year-ago quarter.

ProPetro’s adjusted EBITDA of $34.67 million for its Pressure Pumping unit in the December quarter beat the Zacks Consensus Estimate of $26.54 million. Investors should know that pressure pumping is the main contributor to the company’s earnings. The upside was the outcome of the company’s effective performance and productive cost management.

Pressure Pumping Division

The Midland, TX-based company provides hydraulic fracturing, cementing and acidizing functions through the Pressure Pumping segment. The business contributed 98.1% to the company’s total revenues in the quarter under review. Service revenues plunged 64.4% from the prior-year quarter’s levels to $151.4 million due to significant fall in the number of hydraulic fracturing fleets.

Costs & Expenses

ProPetro reported service cost of $116 million in the fourth quarter, down 62% from the year-ago quarter. General and administrative expenses were $20 million, down 35.7% from $31.1 million in the prior-year quarter.

Balance Sheet & Capital Expenditures

As of Dec 31, ProPetro had cash and cash equivalents worth $68.8 million and did not incur any long-term debt. It also had $52 million under its revolving credit facility. Capital expenditures in the December quarter summed $21 million, down 68.3% from the level in fourth-quarter 2019.

Guidance

With the recovery in commodity prices, ProPetro’s 2021 outlook seems optimistic as the company is well positioned to benefit from growing activity and service pricing in the Permian Basin.

ProPetro projects first-quarter 2021 effective utilization of 9.5-11 fleets, taking into account the recent extreme winter weather events in the Permian Basin.

Zacks Rank & Stocks to Consider

ProPetro has a Zacks Rank #4 (Sell), currently.

Some better-ranked players in the energy space are Matador Resources Company (PDCE Free Report) and Denbury Inc. (DEN Free Report) , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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