Liberty Energy Inc (LBRT) Announces Strong Q3 2023 Financial Results and Raises Quarterly ...
Liberty Energy Inc (NYSE:LBRT) reports Q3 2023 revenue of $1.2 billion, a 2% increase over the prior year.
Net income of $149 million, or $0.85 fully diluted earnings per share, marking a 1% and 10% increase, respectively, over the prior year.
Adjusted EBITDA of $319 million and 12-month Adjusted Pre-Tax Return on Capital Employed of 44%.
Quarterly cash dividend increased by 40% to $0.07 per share beginning Q4 of 2023.
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Liberty Energy Inc (NYSE:LBRT) announced its third quarter 2023 financial and operational results on October 19, 2023. The company reported revenue of $1.2 billion, marking a 2% increase over the prior year. Net income for the quarter was $149 million, or $0.85 fully diluted earnings per share, representing a 1% and 10% increase, respectively, over the prior year. Adjusted EBITDA for the quarter was $319 million, and the 12-month Adjusted Pre-Tax Return on Capital Employed was 44%.
Financial Highlights and Operational Results
Liberty Energy Inc (NYSE:LBRT) achieved its third consecutive quarter of record average daily pumping efficiency, driving solid results. The company began commercial deployment of digiPrime? hybrid pumps, which are expected to be the primary source of future horsepower anchored by the most efficient natural gas frac engines with the lowest emissions profile.
The company delivered strong third quarter free cash flow and returned $38 million to shareholders through share repurchases and a quarterly cash dividend. During the quarter, Liberty repurchased and retired 1.0% of shares outstanding, and a cumulative 10.6% of shares outstanding since reinstating the repurchase program in July 2022.
Liberty Energy Inc (NYSE:LBRT) also announced a 40% increase in its quarterly cash dividend to $0.07 per share, starting in the fourth quarter of 2023. The company was included in the S&P 600 Index prior to the market open on September 18, 2023.
CEO Commentary
Liberty delivered excellent quarterly financial results reflecting outstanding operational execution, focused customer engagement and agility across a softer North American frac market. Record pumping efficiencies drove sequential growth in revenue and Adjusted EBITDA while idling one fleet during the quarter. The industry remained disciplined, championing steady pricing for quality services while withdrawing underutilized frac fleets from the market. Our superior execution combined with expanded vertical integration and technology investments culminated in a trailing 12-month Adjusted Pre-Tax Return on Capital Employed of 44%," commented Chris Wright, Chief Executive Officer.
Outlook
Liberty Energy Inc (NYSE:LBRT) expects the recent strengthening of commodity prices to drive a modest increase in activity beginning in 2024. The company is on track to be operating four digiFleets by year end and six digiFleets by the end of January 2024. For full year 2023, the company expects Adjusted EBITDA to be at the high end of its guidance range of 30% to 40% growth over 2022.
Share Repurchase Program and Dividend Increase
During the third quarter, Liberty repurchased and retired 1,784,899 shares of Class A common stock at an average of $16.38 per share, representing 1.0% of shares outstanding, for approximately $29 million. The company has cumulatively repurchased and retired 10.6% of shares outstanding at program commencement on July 25, 2022. Total remaining authorization for future common share repurchases is approximately $211 million.
On October 17, 2023, the Board declared a cash dividend of $0.07 per share of Class A common stock, to be paid on December 20, 2023 to holders of record as of December 6, 2023. This dividend represents a 40% increase from the prior quarter.
Balance Sheet and Liquidity
As of September 30, 2023, Liberty had cash on hand of $27 million, a slight decrease from second quarter levels, and total debt of $223 million drawn on the secured asset-based revolving credit facility, a $65 million decrease from the second quarter. Total liquidity, including availability under the credit facility, based on the September 30, 2023 financials, was $322 million.
This article first appeared on GuruFocus.
