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Hi-Crush (HCLP) Misses Q1 Earnings and Revenue Estimates

Zacks Equity Research

Hi-Crush Partners LP HCLP posted net loss of $6.2 million or 6 cents per share in first-quarter 2019, against net income of $53.4 million or 59 cents in the year-ago quarter. Loss per share was wider than the Zacks Consensus Estimate of breakeven level.

Revenues tumbled roughly 26.7% year over year to $159.9 million. The figure trailed the Zacks Consensus Estimate of $178.2 million.  

Total frac sand sold during the quarter was 2,411,262 tons, down 7.9% year over year. Contribution margin per ton sold declined 58.1% year over year to $12.19. Average sales price was $48 per ton.

Sales volumes to E&Ps contributed 63% to total sales volumes in the first quarter compared with 51% in fourth-quarter 2018. Also, 24% of the total sales volumes were sold at the wellsite through PropStream compared with 36% in the fourth quarter.

Hi-Crush Partners LP Price, Consensus and EPS Surprise


Hi-Crush Partners LP Price, Consensus and EPS Surprise

Hi-Crush Partners LP price-consensus-eps-surprise-chart | Hi-Crush Partners LP Quote


Operational Update

As of Mar 31, 2019, the partnership had nine PropStream container crews in the Permian Basin and Marcellus/Utica. Also, it had four FB silo systems operating in the Permian.


During first-quarter 2019, Hi-Crush closed the acquisition of BulkTracer Holdings LLC, which is the owner of logistics software system — PropDispatch. Notably, PropDispatch provides the last mile proppant management software for three of the largest oilfield service companies in the United States. It is used across major shale basin in North America.

In May 2019, the partnership also acquired the remaining 34% ownership stake in Proppant Logistics LLC, which owns Pronghorn Logistics. It is a leading provider of end-to-end proppant logistics services to E&Ps. The buyout supports the company’s capabilities across the supply chain and widens the area of operations to new basins.

Financial Position

At the end of the first quarter, the partnership had $60.4 million in cash and $55.2 million in available capacity under the revolving credit facility.

Hi-Crush had outstanding long-term debt of roughly $442.9 million as of Mar 31, up from $193.2 million a year ago.


Hi-Crush projects total sales volumes in the range of 2.5-2.7 million tons in second-quarter 2019. Moreover, full-quarter contribution is expected from the second Kermit facility, which achieved full production capability in March 2019.

The partnership expects Northern White sand to contribute higher volumes from the Wyeville expansion associated with the new E&P contracts.  

Hi-Crush expects sales prices to be mostly unchanged in the second quarter along with a modest ramp in overall completions activity.

Overall, the partnership projects to deploy more than 30 PropStream silo systems over the next few quarters. It expects to achieve this through equipment leases and fully-integrated services.

Notably, the frac sand market continues to remain challenging. However, signs of stabilization and improvement are emerging of late, partly due to an improved macro environment, per the company. Hi-Crush is bringing together a platform of equipment, technology and services that will ensure reliable supply of sand and last mile logistics services.

Price Performance

Hi-Crush’s shares have plunged 81% in the past year compared with the industry’s 9% decline.

Zacks Rank & Key Picks

Hi-Crush currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Materion Corporation MTRN, Fortescue Metals Group Ltd. FSUGY and AngloGold Ashanti Limited AU, all currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Materion has an expected earnings growth rate of 16.4% for 2019. The company’s shares have gained 24% in the past year.

Fortescue Metals has an expected earnings growth rate of 101.5% for the current year. The company’s shares have surged 39.7% in a year’s time.

AngloGold has an expected earnings growth rate of 86.8% for 2019. Its shares have rallied 26.7% in a year’s time.

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