ProPetro (PUMP) Q1 Earnings Miss Estimates, Revenues Beat
ProPetro Holding PUMP reported first-quarter 2023 earnings per share of 40 cents, which missed the Zacks Consensus Estimate of 49 cents. The underperformance could be primarily attributed to a 38% increase in costs and expenses year over year.
The bottom line improved from 11 cents in the prior-year period due to increased activity in the reported quarter.
Revenues of $423.6 million outpaced the consensus mark of $410 million. The figure also increased 49.8% from the year-ago quarter’s $282.7 million. This was due to improved pricing and fleet repositioning, additional net pricing gains, a favorable job mix and strong Hydraulic Fracturing performance.
Adjusted EBITDA amounted to $119.2 million, up 77% from $67 million in the previous quarter. The increase is primarily attributable to additional net pricing gains and continued fleet repositioning.
ProPetro Holding Corp. Price, Consensus and EPS Surprise
ProPetro Holding Corp. price-consensus-eps-surprise-chart | ProPetro Holding Corp. Quote
Pressure Pumping
ProPetro provides hydraulic fracturing, cementing and acidizing functions through its Pressure Pumping segment. The business contributed 100% to PUMP's total revenues in the quarter under review. Service revenues from this unit surged about 49.8% to $423.6 million from the prior-year quarter’s level. This was mainly due to higher fleet strength and enhanced pricing.
Costs & Financial Position
ProPetro’s first-quarter total costs and expenses amounted to $382.1 million, up 38% from the prior-year quarter’s level. The service cost was $280.5 million compared with $197.3 million in the comparable period of 2022.
The company spent $97.2 million on capital expenditure. It also recorded negative free cash flows of $40.7 million in the first quarter.
As of Mar 31, PUMP had approximately $44.8 million in cash and cash equivalents. Including cash and $30 million under its revolving credit facility, the company had total liquidity worth $149 million at the end of March 2023. Long-term debt amounted to $30 million. The total debt-to-total capital was 3%.
Guidance
ProPetro’s guidance for average effective fleet utilization is between 15 and 16 fleets for the second quarter.
The company’s projection for 2023 CapEx spending is at $250-$300 million.
Zacks Rank and Key Picks
Currently, ProPetro Holding carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors interested in the energy sector are Evolution Petroleum EPM, sporting a Zacks Rank #1 (Strong Buy), and Archrock AROC and Murphy USA MUSA, both holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Evolution Petroleum: EPM is worth approximately $219.16 million. EPM currently pays investors $0.48 per share, or 7.38%, on an annual basis.
The company currently has a forward P/E ratio of 6.07. In comparison, its industry has an average forward P/E of 7.50, which means EPM is trading at a discount to the group.
Archrock: AROC is valued at around $1.55 billion. It delivered an average earnings surprise of 26.27% for the last four quarters and its current dividend yield is 6.06%.
Archrock is a provider of natural gas contract compression services as well as aftermarket services of compression equipment.
Ranger Energy Services: RNGR is valued at around $183.61 million. In the past year, its shares have gained 13.8%.
Ranger Energy Services currently has a forward P/E ratio of 5.30. In comparison, its industry has an average forward P/E of 11.60, which means RNGR is trading at a discount to the group.
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