Will Higher Oil & Gas Margin Aid U.S. Silica (SLCA) Q2 Earnings?
U.S. Silica Holdings, Inc. SLCA is scheduled to come up with second-quarter 2023 results after the bell on Jul 27. Higher year-over-year prices and contribution margins in the Oil & Gas division are expected to have supported its performance in the quarter.
Higher Demand & Prices to Drive Oil & Gas
U.S. Silica is expected to have benefited, in the quarter to be reported, from strong contribution margins in its Oil & Gas segment, which accounted for around 63% of the company’s revenues in 2022. The segment is likely to have witnessed continued strong customer demand and higher proppant prices in the quarter.
The Oil & Gas division is benefiting from favorable customer sentiment and the strength in crude oil prices, which is supporting strong well completion activities. SLCA is likely to have witnessed a continued increase in sand and sandbox prices in the to-be-reported quarter. This, along with higher plant efficiencies, is likely to have driven contribution margins in this segment.
Our estimate for second-quarter Oil & Gas contribution margin stands at $109.7 million, suggesting a 41.8% year-over-year rise. Our estimate for average selling prices per ton for Oil & Gas Proppants is pegged at $76.48 for the quarter, calling for a 10.5% year-over-year increase.
The company’s Industrial & Specialty Products division is also expected to have witnessed higher contribution margins in the June quarter on the back of price increases, cost-reduction actions and improved operational efficiencies. Our estimate for contribution margin for Industrial & Specialty Products is pegged at $49 million, reflecting a 6.6% year-over-year rise.
U.S. Silica Holdings, Inc. Price and EPS Surprise
U.S. Silica Holdings, Inc. price-eps-surprise | U.S. Silica Holdings, Inc. Quote
Overall Expectations
The Zacks Consensus Estimate for second-quarter consolidated revenues for U.S. Silica is currently pegged at $435 million, reflecting a year-over-year rise of 11.9%. The consensus estimate for earnings is 54 cents, which indicates a 68.8% rise from the prior-year reported number.
Zacks Model
Our proven model does not conclusively predict an earnings beat for U.S. Silica this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for U.S. Silica is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: U.S. Silica currently carries a Zacks Rank #3.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Agnico Eagle Mines Limited AEM, which is scheduled to release earnings on Jul 26, has an Earnings ESP of +3.34% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AEM’s earnings for the second quarter is currently pegged at 55 cents.
Axalta Coating Systems Ltd. AXTA, which is slated to release its earnings on Aug 1, has an Earnings ESP of +6.02%.
The consensus estimate for AXTA’s earnings for the second quarter is currently pegged at 39 cents. It currently carries a Zacks Rank #2.
Livent Corporation LTHM, scheduled to release earnings on Aug 3, has an Earnings ESP of +3.58% and carries a Zacks Rank #1.
The consensus estimate for LTHM’s earnings for the second quarter is currently pegged at 45 cents.
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Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report
U.S. Silica Holdings, Inc. (SLCA) : Free Stock Analysis Report
Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report
Livent Corporation (LTHM) : Free Stock Analysis Report
