ProPetro (PUMP) Q4 Earnings and Revenues Miss Estimates
ProPetro Holding PUMP reported fourth-quarter 2023 loss per share of 16 cents, which missed the Zacks Consensus Estimate of earnings of 8 cents per share. The bottom line also declined from the year-ago quarter’s reported profit of 31 cents. The underperformance could be primarily attributed to a 7.7% increase in costs and expenses year over year.
Revenues of $347.8 million missed the consensus mark of $360 million. The figure also decreased 0.3% from the year-ago quarter’s level of $348.9 million. This was due to a decline in hydraulic fracturing utilization.
Adjusted EBITDA amounted to $64.3 million, down 40.3% from $107.7 million reported in the previous quarter.The reported figure also missed our estimate of $84.8 million. This underperformance was primarily due to lower hydraulic fracturing utilization caused by higher-than-expected seasonality, holiday and customer budget exhaustion impacts.
PUMP completed the acquisition of Par Five Energy Services LLC, a Permian Basin-focused provider of cementing services in the Delaware Basin, during the fourth quarter of 2023.
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 slightly decreased 0.3% to $347.8 million from the prior-year quarter’s level. This was mainly due to additional deferred activity later, as well as seasonal fluctuations and the depletion of customer budgets.However, the figure was lower than our estimate of $360.9 million.
Costs & Financial Position
Total costs and expenses were $356.1 million for the fourth quarter, up 7.7% from the prior-year quarter’s level. The service cost was $261 million compared with $242.6 million in the comparable period of 2022. Depreciation and amortization totaled $62.2 million compared with $43.5 million in the comparable period of 2022. The company recorded $39 million in capital expenditure.
As of Dec 31, PUMP had approximately $33 million in cash and cash equivalents. Including cash and $134 million under its revolving credit facility, the company had total liquidity worth $101 million at December-end 2023. Long-term debt amounted to $45 million. The total debt-to-total capital was 4.3%.
The company repurchased and retired 1.6 million shares during the fourth quarter of 2023. During the same period, the net cash used for investing activities totaled $71 million.
Guidance
ProPetro expects effective fleet utilization to be in the range of 14-15 for the first quarter of 2024.
It anticipates total incurred capital expenditures to be between $200 million and $250 million, down from $310 million registered in 2023.
Zacks Rank and Key Picks
Currently, PUMP carries a Zacks Rank #5 (Strong Sell).
Investors interested in the energy sector might look at some better-ranked stocks like Subsea 7 S.A. SUBCY and Energy Transfer LP ET, both sporting a Zacks Rank #1 (Strong Buy), and Murphy USA Inc. MUSA, carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Subsea 7 is valued at $3.97 billion. The company currently pays a dividend of 38 cents per share, or 2.94%, on an annual basis.
SUBCY offers offshore project services for the energy industry, specializing in subsea field development, covering project management, design, engineering, procurement, fabrication, survey, installation and commissioning of seabed production facilities.
Energy Transfer is valued at $49.3 billion. The company currently pays a dividend of $1.26 per share, or 8.61%, on an annual basis.
ET is an independent energy company, principally engaged in the acquisition, exploration, development and production of crude oil and natural gas.
Murphy USA is valued at around $8.47 billion. In the past year, its shares have risen 48.9%.
MUSA is involved in the marketing of retail motor fuel products and convenience merchandise, operating retail stores under the brands Murphy USA, Murphy Express and QuickChek.
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