ProPetro Holding Corp. (PUMP - Free Report) reported third-quarter net income per share of 33 cents, missing the Zacks Consensus Estimate of 48 cents and below the year-ago period's bottom-line figure of 53 cents. The underperformance stems from tepid demand for the company’s services as clients – the upstream energy players – take a cautious approach to capital spending amid depressed oil and gas prices.
ProPetro’s revenues of $541.8 million improved 24.8% year over year and came above the Zacks Consensus Estimate of $509 million, driven by impressive operating efficiency and contribution from Pioneer Natural Resources’ (PXD - Free Report) pressure pumping assets in the Permian Basin.
Adjusted EBITDA in the third quarter amounted to $131.9 million, increasing from $103.4 million a year ago.
Pressure Pumping Division
ProPetro, through its Pressure Pumping division, provides hydraulic fracturing, cementing and acidizing functions. The business accounted for 97.6% of the company's total revenues in the quarter under review.
Costs & Expenses
ProPetro reported cost of services of $396.9 million in third-quarter 2019, 24% higher than the year-ago quarter. Meanwhile, general and administrative expenses came in at $27.6 million, up from $12.8 million in the year-ago period.
Balance Sheet & Capital Expenditure
As of Sep 30, ProPetro had cash and cash equivalents of $109.2 million while its long-term debt was $130 million – for a negative net cash position. The company’s debt-to-capitalization ratio was 12.1%. ProPetro also has $64.3 million available under the revolving credit facility.Capital expenditure for the three months reached $87 million, up 17.3% compared to the third quarter of 2018. Payments toward the new-build DuraStim hydraulic fracturing fleets accounted for the rise in outlay.
Guidance & Electric Fracking Foray
ProPetro expects an average of 18-20 effective fleets in the fourth quarter, down from 25.1 in the third quarter of 2019. The fall in utilization is due to slowdown in customer spending, seasonality and a general lack of demand.
Importantly, the company is making its foray in the electric fracking technology and plans to employ one such DuraStim fleet by late 2019/early 2020 and two more subsequently in 2020. The 36,000 horsepower DuraStim fleets – boasting of fuel efficiency and lower costs – will be deployed under dedicated agreements with existing clients.
During the third quarter, ProPetro also added a unit to its cementing fleet, which brought the cementing fleet count to 23.
Zacks Rank & Stock Picks
ProPetro currently carries a Zacks Rank #5 (Strong Sell). Meanwhile, investors interested in the energy space could look at some better options like Murphy USA Inc. (MUSA - Free Report) and Phillips 66 (PSX - Free Report) that carry a Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy), respectively.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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ProPetro Holding Corp. (PUMP - Free Report) reported third-quarter net income per share of 33 cents, missing the Zacks Consensus Estimate of 48 cents and below the year-ago period's bottom-line figure of 53 cents. The underperformance stems from tepid demand for the company’s services as clients – the upstream energy players – take a cautious approach to capital spending amid depressed oil and gas prices.
ProPetro’s revenues of $541.8 million improved 24.8% year over year and came above the Zacks Consensus Estimate of $509 million, driven by impressive operating efficiency and contribution from Pioneer Natural Resources’ (PXD - Free Report) pressure pumping assets in the Permian Basin.
Adjusted EBITDA in the third quarter amounted to $131.9 million, increasing from $103.4 million a year ago.
Pressure Pumping Division
ProPetro, through its Pressure Pumping division, provides hydraulic fracturing, cementing and acidizing functions. The business accounted for 97.6% of the company's total revenues in the quarter under review.
Costs & Expenses
ProPetro reported cost of services of $396.9 million in third-quarter 2019, 24% higher than the year-ago quarter. Meanwhile, general and administrative expenses came in at $27.6 million, up from $12.8 million in the year-ago period.
Balance Sheet & Capital Expenditure
As of Sep 30, ProPetro had cash and cash equivalents of $109.2 million while its long-term debt was $130 million – for a negative net cash position. The company’s debt-to-capitalization ratio was 12.1%. ProPetro also has $64.3 million available under the revolving credit facility.Capital expenditure for the three months reached $87 million, up 17.3% compared to the third quarter of 2018. Payments toward the new-build DuraStim hydraulic fracturing fleets accounted for the rise in outlay.
Guidance & Electric Fracking Foray
ProPetro expects an average of 18-20 effective fleets in the fourth quarter, down from 25.1 in the third quarter of 2019. The fall in utilization is due to slowdown in customer spending, seasonality and a general lack of demand.
Importantly, the company is making its foray in the electric fracking technology and plans to employ one such DuraStim fleet by late 2019/early 2020 and two more subsequently in 2020. The 36,000 horsepower DuraStim fleets – boasting of fuel efficiency and lower costs – will be deployed under dedicated agreements with existing clients.
During the third quarter, ProPetro also added a unit to its cementing fleet, which brought the cementing fleet count to 23.
Zacks Rank & Stock Picks
ProPetro currently carries a Zacks Rank #5 (Strong Sell). Meanwhile, investors interested in the energy space could look at some better options like Murphy USA Inc. (MUSA - Free Report) and Phillips 66 (PSX - Free Report) that carry a Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy), respectively.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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