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ProPetro (PUMP) Stock Dips 12% Despite Q2 Earnings Beat

The stock of ProPetro Holding Corp. PUMP has declined 12.1% since its second-quarter earnings announcement on Aug 2.

This decline in the stock price came in despite the Permian-focused equipment and service provider of the energy industry posting revenues and earnings that beat the consensus mark. The downtrend shown in the share price could only be attributed to the overall bearishness prevailing in markets.

What Did ProPetro’s Earnings Unveil?

ProPetro reported second-quarter 2022 earnings per share of 29 cents, beating the Zacks Consensus Estimate of 26 cents and improving from the year-ago loss of 8 cents. The outperformance could primarily be attributed to improved pricing and increased activity in the reported quarter.

Moreover, revenues of $315 million outpaced the consensus mark of $309 million and jumped 45.3% from the year-ago quarter’s sales of $216.9 million due to additional net pricing gains and increased fleet utilization. This was supported by greater-than-expected revenues from the Pressure Pumping unit – the major contributor to PUMP’s sales. The segment reported revenues of $309.4 million, higher than the consensus mark of $304 million.

This oilfield service provider’s adjusted EBITDA in the second quarter amounted to $76 million, 13.4% up sequentially from $67 million in the last quarter. The sequential increase is primarily attributable to additional pricing gains, increased activity and continued fleet repositioning.

Lastly, ProPetro’s adjusted EBITDA for the Pressure Pumping unit in the June quarter came in at $86.3 million, which marginally outperformed the Zacks Consensus Estimate of $86 million.

ProPetro Holding Corp. Price, Consensus and EPS Surprise

ProPetro Holding Corp. Price, Consensus and EPS Surprise
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 the Pressure Pumping segment. The business contributed a little more than 98.2% to PUMP's total revenues in the quarter under review. In particular, service revenues from this unit surged about 11.7% from the last quarter’s levels to $309.4 million, attributable to augmented activity and enhanced pricing.

Costs & Financial Position

ProPetro’s second-quarter total costs and expenses were $355.3 million, up 55.4% from the prior-year quarter. The service cost was $218.8 million compared with $162.8 million in the second quarter of 2021.

The company spent $80 million on capital expenditure. In the second quarter, the company booked $0.6 million of positive free cash flows.

As of Jun 30, the Midland, TX-based operator had approximately $69.8 million in cash and cash equivalents and no debt. ProPetro had total liquidity of $185 million at the end of June 2022.

Guidance

ProPetro’s guidance for effective utilization for the second half of 2022 is anticipated in the range of 14-15 fleets.

The company updated its outlook for the full-year CapEx spending to the $300-350 range from the earlier guidance between $250 million and $300 million.

Zacks Rank & Stock Picks

ProPetro currently has a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy space that warrant a look include Earthstone Energy ESTE, TotalEnergies TTE and RPC RES, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Earthstone’s 2022 earnings stands at $5.11 per share, up about 308.8% from the year-ago earnings of $1.25.

ESTE beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 27%.

The Zacks Consensus Estimate for TotalEnergies’ 2022 earnings is pegged at $13.83 per share, up about 107% from the year-ago earnings of $6.68.

TTE beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 14.6%.

The Zacks Consensus Estimate for RPC’s 2022 earnings is pegged at 55 cents per share, up 1733% from the year-ago earnings of 3 cents.

RES beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 80%.


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