ProPetro (PUMP) Q3 Earnings and Revenues Beat Estimates
ProPetro Holding Corp.’s PUMP third-quarter 2023 earnings per share of 31 cents beat the Zacks Consensus Estimate of 29 cents. The outperformance could be primarily attributed to improved pricing and increased activity in the reported quarter.
The bottom line, however, declined from the year-ago quarter’s reported level of 38 cents due to an 18.7% year-over-year increase in costs and expenses.
Revenues of $423.8 million beat the consensus mark of $411 million. The figure also improved 27.3% from the year-ago quarter’s level of $333 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 $107.7, down 4.5% from $112.8 million in the previous quarter. The reported figure also missed our estimate of $107.1 million. This underperformance was primarily due to lower activity and pricing during the quarter.
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 28.8% to $423.8 million from the prior-year quarter’s level. This was mainly due to higher fleet strength and enhanced pricing. The figure beat our estimate of $407.3 million.
Costs & Financial Position
Total costs and expenses were $379.1 million for the third quarter, up 18.7% from the prior-year quarter’s level. The service cost was $292.5 million compared with $224.1 million in the comparable period of 2022.
The company recorded $59 million capital expenditure. It also reported positive free cash flow of $27 million.
As of Sep 30, PUMP had approximately $54 million in cash and cash equivalents. Including cash and $126 million under its revolving credit facility, the company had total liquidity worth $180 million at September-end 2023. Long-term debt amounted to $45 million. The total debt-to-total capital was 4.6%.
Guidance
ProPetro expects effective fleet utilization to be in the range of 13-14 for the fourth half of 2023.
It anticipates total incurred capital expenditures to be slightly more than $300 million in 2023 compared with $365 million in 2022.
Zacks Rank and Key Picks
Currently, PUMP carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like Liberty Energy Inc. LBRT, sporting a Zacks Rank #1 (Strong Buy), and CVR Energy, Inc. CVI and Delek US Holdings, Inc. DK, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Liberty Energy is valued at $3.41 billion. LBRT currently pays a dividend of 20 cents per share, or 0.99% on an annual basis.
LBRT is a leading provider of hydraulic fracturing and other auxiliary services to North American onshore exploration and production companies.
CVR Energy is valued at $3.28 billion. In the past year, its shares have lost 19%.
CVI currently pays a dividend of $2 per share or 6.13% on an annual basis. Its payout ratio currently sits at 30% of earnings.
Delek US Holdings is worth approximately $1.69 billion. DK currently pays a dividend of 94 cents per share, or 3.61% on an annual basis.
The company operates in the integrated downstream energy business in the United States. It operates under three segments — refining, logistics and retail.
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