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Liberty (LBRT) Down 16.4% After Wider-Than-Expected Q2 Loss

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The stock of Denver-CO-based Liberty Oilfield Services Inc. LBRT has lost around 16.4% since its second-quarter earnings announcement on Jul 27. The company’s worse-than-expected top and bottom-line performance and investor scepticism, fuelled by the prevailing industry supply chain challenges and management’s unwillingness to deploy additional capacity, triggered the negative reaction.

What Did Liberty Oilfield’s Earnings Unveil?

Liberty Oilfield Services reported second-quarter 2021 loss per share of 29 cents, wider than the Zacks Consensus Estimate of a loss of 12 cents. The underperformance reflects higher operating expenses, which soared to $617.3 million from $161.9 million in the second quarter of 2020.

However, the bottom line compared favorably with the year-ago quarter’s loss of 55 cents due to strong execution and contribution from the onshore hydraulic fracturing business in the United States and Canada that the company acquired from Schlumberger SLB in January.

Total revenues came in at $581.3 million, below the Zacks Consensus Estimate of $595 million, but surged from the year-ago level of $88.4 million.

The second-quarter adjusted EBITDA was $36.6 million against the prior-year quarter loss of $8.3 million. Meanwhile, Liberty’s fleet count most likely stayed around the low 30s throughout the quarter.

Liberty Oilfield Services Inc. Price, Consensus and EPS Surprise

Liberty Oilfield Services Inc. Price, Consensus and EPS Surprise
Liberty Oilfield Services Inc. Price, Consensus and EPS Surprise

Liberty Oilfield Services Inc. price-consensus-eps-surprise-chart | Liberty Oilfield Services Inc. Quote

Balance Sheet & Capital Expenditure

As of Jun 30, Liberty had approximately $30.7 million in cash and cash equivalents. The pressure pumper’s long-term debt of $105.2 million represented a debt-to-capitalization of 7.9%. Further, the company’s liquidity — cash balance, plus revolving credit facility — amounted to $277 million.

In the reported quarter, the company spent $37.7 million on its capital program.

Guidance

Liberty management sees continued economic expansion driving rising energy usage while lack of capital spending in the energy sector would limit supply. At the same time, the company is not immune to macro issues like trucking shortages, completion delays by clients and labor scarcity. Liberty expects its near-term deployed fleet count to stay essentially flat.

Zacks Rank & Stock Picks

Liberty currently carries a Zacks Rank #4 (Sell).

Some better-ranked players in the energy space are EOG Resources EOG and Suncor Energy SU. Both the companies sport a Zacks Rank #1 (Strong Buy).

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

EOG Resources has an expected earnings growth rate of 389.04% for the current year.

Suncor Energy has an expected earnings growth rate of 281.82% for the current year.


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Schlumberger Limited (SLB) : Free Stock Analysis Report

EOG Resources, Inc. (EOG) : Free Stock Analysis Report

Suncor Energy Inc. (SU) : Free Stock Analysis Report

Liberty Oilfield Services Inc. (LBRT) : Free Stock Analysis Report

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