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ProPetro (PUMP) Rallies 13.4% Despite Missing on Q2 Earnings

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Shares of ProPetro Holding Corp. (PUMP - Free Report) have rallied more than 13% since second-quarter 2020 earnings announcement on Aug 4. Although the bottom line missed the Zacks Consensus Estimate, investors were impressed by the company’s effort in maintaining a debt-free balance sheet in the quarter under review while having $13.1 million under its revolving credit facility. Further, the company’s pressure pumping business was able to achieve better-than-anticipated profitability even amid the challenging operating environment. ProPetro recorded adjusted EBITDA of $34 million, ahead of the Zacks Consensus Estimate of $20.1 million. This upside is indicative of the company’s operating efficiencies and successful cost control.

ProPetro reported second-quarter adjusted net loss per share of 26 cents, wider than the Zacks Consensus Estimate of a loss of 20 cents. However, the year-ago bottom line was earnings of 35 cents. This underperformance is due to decline in activity levels and pricing.  

Meanwhile, ProPetro’s revenues of $106.11 million were in line with the Zacks Consensus Estimate, attributable to better-than-expected pressure pumping revenues. Precisely, this oilfield service provider’s pressure pumping revenues of $103.8 million surpassed the Zacks Consensus Estimate of $97 million. But the top line fell 80% year over year.

Adjusted EBITDA in the second quarter amounted to $25.4 million, decreasing from $126.6 million a year ago.

Pressure Pumping Division

This Midland, TX-based company through its Pressure Pumping division provides hydraulic fracturing, cementing and acidizing functions. The business accounted for 97.8% of the company's total revenues in the quarter under review. Service revenues plunged more than 79.8% from the year-ago period to $103.8 million as the number of hydraulic fracturing fleets dropped significantly.

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

Costs & Expenses

ProPetro reported cost of services of $68.2 million in the second quarter, down 82.3% from the year-ago quarter. General and administrative expenses came in at $20.3 million, down from $27.9 million in the year-ago period.

Balance Sheet & Capital Expenditure

As of Jun 30, ProPetro had cash and cash equivalents worth $37.3 million and did not incur any long-term debt. ProPetro also has $13.1 million under its revolving credit facility. Capital expenditure for the June quarter totaled $11.9 million, down 92.6% from the level in second-quarter 2019.

Guidance

ProPetro’s outlook for the remaining year looks uncertain as the oilfield activity in North America is yet to recuperate up to a level favourable enough to produce a competitive return.

However, the company remains optimistic about sustaining strong customer relationships, a debt-free balance sheet and deep bench of committed talent.

Zacks Rank & Performance of Other Energy Players

ProPetro currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Murphy USA Inc. (MUSA - Free Report) , CNOOC Limited (CEO - Free Report) and SilverBow Resources Inc. (SBOW - Free Report) , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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