Liberty Oilfield Services (LBRT) Down 9.3% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Liberty Oilfield Services (LBRT). Shares have lost about 9.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Liberty Oilfield Services due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Liberty Energy Q3 Earnings and Revenues Beat Estimates
Liberty Energy reported third-quarter 2023 earnings of 85 cents per share, which beat the Zacks Consensus Estimate of 74 cents. The bottom line also outperformed the year-ago quarter’s reported figure of 78 cents. The Denver-CO-based oil and gas equipment company’s outperformance reflects the impact of strong execution and increased service pricing.
Revenues totaled $1.22 billion, which beat the Zacks Consensus Estimate by 7%. The figure also outperformed the prior-year quarter’s level of $1.19 billion by 2.5%.
The Denver-CO-based oil and gas equipment company’s adjusted EBITDA was $319.4 million compared with $276.9 million in the year-ago quarter. The figure beat our projection of $250.3 million.
Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Dec 20, 2023, to stockholders of record as of Dec 6, 2023. This dividend is up 40% from the previous quarter’s level.
As part of its shareholder return policy, LBRT repurchased shares worth $29 million at an average price of $16.38 per share.
Costs and Expenses
LBRT reported total costs and expenses of $1.01 billion in the third quarter, up 0.5% from the year-ago quarter’s level. The figure is also higher than our projected level of $949.9 million.
Balance Sheet & Capital Expenditure
As of Sep 30, LBRT had approximately $27 million in cash and cash equivalents. Its long-term debt of $223 million represented a debt-to-capitalization of 11.1%. The company’s liquidity, cash balance plus revolving credit facility, amounted to $322 million.
Liberty Energy spent $161.4 million on its capital program in the reported quarter compared with $95 million in the year-ago period. However, the figure fell short of our prediction of $230.2 million.
Guidance
LBRT anticipates Adjusted EBITDA growth of 30-40% over 2022 for full-year 2023.
The company expects fracking activity to increase slightly in 2024 because of the recent rise in oil and gas prices. However, fracking activity is expected to decline slightly in the fourth quarter due to seasonal softness, cold weather and holiday disruptions.
Liberty Energy expects global oil and gas markets to rise due to North American demand and OPEC+ decisions, including Saudi Arabia's production cuts and encouraging long-term investments in North American shale.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Liberty Oilfield Services has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Liberty Oilfield Services has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Liberty Energy Inc. (LBRT) : Free Stock Analysis Report
