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ProPetro's (PUMP) Q4 Loss Narower Than Expected, Sales Miss

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ProPetro Holding Corp. (PUMP - Free Report) reported fourth-quarter adjusted net loss of 13 cents per share, narrower than the Zacks Consensus Estimate’s loss of 20 cents attributable to better-than-expected revenue contribution from thePressure Pumping unit. The segment reported revenues of $151.4 million, beating the Zacks Consensus Estimate of $146 million.

However, the bottom line compared unfavorably with the year-ago quarter’s earnings of 25 cents. The underperformance reflects higher year-over-year impairment expense and lower activity levels, with effective utilization for the period at 9.6 fleets, falling sharply from the year-ago quarter’s 19.2.        

Quarterly revenues of $154 million missed the Zacks Consensus Estimate sales of $155 million and declined more than 64.5% from the year-ago quarter.

The oilfield service provider’s pressure pumping revenues of $151.4 million outpaced the consensus mark of $146 million. However, the same declined 64.5% year over year. Adjusted EBITDA in the fourth quarter amounted to $24 million, down from $110.3 million in the year-ago quarter.

ProPetro’s adjusted EBITDA of $34.67 million for its Pressure Pumping unit in the December quarter beat the Zacks Consensus Estimate of $26.54 million. Investors should know that pressure pumping is the main contributor to the company’s earnings. The upside was the outcome of the company’s effective performance and productive cost management.

Pressure Pumping Division

The Midland, TX-based company provides hydraulic fracturing, cementing and acidizing functions through the Pressure Pumping segment. The business contributed 98.1% to the company's total revenues in the quarter under review. Service revenues plunged 64.4% from the prior-year quarter’s levels to $151.4 million due to significant fall in the number of hydraulic fracturing fleets.

Costs & Expenses

ProPetro reported service cost of $116 million in the fourth quarter, down 62% from the year-ago quarter. General and administrative expenses were $20 million, down 35.7% from $31.1 million in the prior-year quarter.

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

Balance Sheet & Capital Expenditures

As of Dec 31, ProPetro had cash and cash equivalents worth $68.8 million and did not incur any long-term debt. It also had $52 million under its revolving credit facility. Capital expenditures in the December quarter summed $21 million, down 68.3% from the level in fourth-quarter 2019.

Guidance

With the recovery in commodity prices, ProPetro’s 2021 outlook seems optimistic as the company is well positioned to benefit from growing activity and service pricing in the Permian Basin.

ProPetro projects first-quarter 2021 effective utilization of 9.5-11 fleets, taking into account the recent extreme winter weather events in the Permian Basin.

Zacks Rank & Stocks to Consider

ProPetro has a Zacks Rank #4 (Sell), currently.

Some better-ranked players in the energy space are Matador Resources Company (MTDR - Free Report) , PDC Energy, Inc. and Denbury Inc. , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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