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U.S. Silica (SLCA) Earnings & Sales Trail Estimates in Q3
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U.S. Silica Holdings, Inc. (SLCA - Free Report) saw its profits drop in the third quarter of 2018. The frac sand producer logged a profit of $6.3 million or 8 cents per share in the quarter, down roughly 85% from $41.3 million or 50 cents in the year-ago quarter. The bottom line in the reported quarter was hurt by costs associated with plant capacity expansion and merger and acquisition-related expenses.
Barring one-time items, adjusted earnings came in at 44 cents per share, which trailed the Zacks Consensus Estimate of 59 cents.
U.S. Silica reported revenues of $423.2 million for the quarter, up around 23% year over year. However, it missed the Zacks Consensus Estimate of $472.2 million.
U.S. Silica Holdings, Inc. Price, Consensus and EPS Surprise
Revenues in the Oil & Gas division were $302.5 million in the quarter, up roughly 6% year over year. Overall sales volume rose 21% year over year to 3.821 million tons.
Oil & Gas contribution margin was $89.6 million in the quarter, down 22% sequentially and 7% year over year. The company witnessed significantly lower pricing in the back half of the quarter.
Revenues in the Industrial and Specialty Products (ISP) division came in at $120.7 million, up 106% year over year. Overall sales volume rose 6% year over year to 0.983 million tons. ISP contribution margin went up 18% sequentially and 103% year over year to $48.7 million, driven by strong legacy business and the EP Minerals acquisition.
Financials
U.S. Silica had $345.6 million in cash and cash equivalents at the end of the quarter, down roughly 25% year over year.
Long-term debt rose to roughly $1,251.1 million from $506.6 million in the prior-year quarter. Total debt was $1,264.5 million. Capital spending in the quarter was $61.6 million. U.S. Silica also generated operating cash flow of $94.7 million during the quarter.
Outlook
U.S. Silica expects capital expenditures for 2018 to be roughly $350 million. It also sees annual effective tax rate to be 11% for the year.
The company envisions a seasonal slowdown in ISP volumes and a seasonal decline in higher margin ground product sales in the fourth quarter as customers idle production facility for major maintenance and holidays.
Price Performance
U.S. Silica’s shares have lost 44.3% over the past three months, underperforming the 11.1% decline of the industry. The company’s shares tumbled 12.2% to close at $13.75 yesterday, reflecting the lower-than-expected third-quarter results.
Zacks Rank & Stocks to Consider
U.S. Silica currently carries a Zacks Rank #5 (Strong Sell).
Methanex has an expected long-term earnings growth rate of 15%. The company’s shares have rallied around 36% over a year.
KMG Chemicals has an expected long-term earnings growth rate of 28.5%. The company’s shares are up roughly 38% over a year.
CF Industries has an expected long-term earnings growth rate of 6%. The company’s shares have gained around 25% in a year’s time.
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U.S. Silica (SLCA) Earnings & Sales Trail Estimates in Q3
U.S. Silica Holdings, Inc. (SLCA - Free Report) saw its profits drop in the third quarter of 2018. The frac sand producer logged a profit of $6.3 million or 8 cents per share in the quarter, down roughly 85% from $41.3 million or 50 cents in the year-ago quarter. The bottom line in the reported quarter was hurt by costs associated with plant capacity expansion and merger and acquisition-related expenses.
Barring one-time items, adjusted earnings came in at 44 cents per share, which trailed the Zacks Consensus Estimate of 59 cents.
U.S. Silica reported revenues of $423.2 million for the quarter, up around 23% year over year. However, it missed the Zacks Consensus Estimate of $472.2 million.
U.S. Silica Holdings, Inc. Price, Consensus and EPS Surprise
U.S. Silica Holdings, Inc. Price, Consensus and EPS Surprise | U.S. Silica Holdings, Inc. Quote
Segment Highlights
Revenues in the Oil & Gas division were $302.5 million in the quarter, up roughly 6% year over year. Overall sales volume rose 21% year over year to 3.821 million tons.
Oil & Gas contribution margin was $89.6 million in the quarter, down 22% sequentially and 7% year over year. The company witnessed significantly lower pricing in the back half of the quarter.
Revenues in the Industrial and Specialty Products (ISP) division came in at $120.7 million, up 106% year over year. Overall sales volume rose 6% year over year to 0.983 million tons. ISP contribution margin went up 18% sequentially and 103% year over year to $48.7 million, driven by strong legacy business and the EP Minerals acquisition.
Financials
U.S. Silica had $345.6 million in cash and cash equivalents at the end of the quarter, down roughly 25% year over year.
Long-term debt rose to roughly $1,251.1 million from $506.6 million in the prior-year quarter. Total debt was $1,264.5 million. Capital spending in the quarter was $61.6 million. U.S. Silica also generated operating cash flow of $94.7 million during the quarter.
Outlook
U.S. Silica expects capital expenditures for 2018 to be roughly $350 million. It also sees annual effective tax rate to be 11% for the year.
The company envisions a seasonal slowdown in ISP volumes and a seasonal decline in higher margin ground product sales in the fourth quarter as customers idle production facility for major maintenance and holidays.
Price Performance
U.S. Silica’s shares have lost 44.3% over the past three months, underperforming the 11.1% decline of the industry. The company’s shares tumbled 12.2% to close at $13.75 yesterday, reflecting the lower-than-expected third-quarter results.
Zacks Rank & Stocks to Consider
U.S. Silica currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks worth considering in the basic materials space include Methanex Corporation (MEOH - Free Report) , KMG Chemicals, Inc. and CF Industries Holdings, Inc. (CF - Free Report) , each carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Methanex has an expected long-term earnings growth rate of 15%. The company’s shares have rallied around 36% over a year.
KMG Chemicals has an expected long-term earnings growth rate of 28.5%. The company’s shares are up roughly 38% over a year.
CF Industries has an expected long-term earnings growth rate of 6%. The company’s shares have gained around 25% in a year’s time.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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