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ProPetro (PUMP) Stock Down 11.8% Since Wider Loss Posted for Q2

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Shares of ProPetro Holding Corp. (PUMP - Free Report) have dropped 11.8% since the company’s second-quarter 2021 earnings announcement on Aug 3.

This southbound stock movement is induced by a wider-than-anticipated loss reported for the second quarter as well as higher service cost resulting from increased levels of activity and inflationary effects from other direct expenditures.

Insight Into the Earnings Report

ProPetro reported second-quarter adjusted net loss of 8 cents per share, wider than the Zacks Consensus Estimate of a loss of 6 cents. This underperformance was due to escalated service costs.

However, the bottom line narrowed from the year-ago quarter’s loss of 26 cents per share attributable to better-than-expected revenue contribution from the Pressure Pumping unit. The segment reported revenues of $213.5 million, outpacing the consensus mark of $200 million.

Quarterly revenues of $216.89 million outpaced the Zacks Consensus Estimate of $203 million and also increased from the year-ago quarter’s $106.11 million.

This oilfield service provider’s adjusted EBITDA in the second quarter amounted to $36 million, up from $25.4 million in the year-ago quarter. Full-quarter contributions from fleet reactivation during the first quarter of this year led to the increase in Adjusted EBITDA.

ProPetro’s adjusted EBITDA of $46.83 million in its Pressure Pumping unit during the June quarter surpassed the Zacks Consensus Estimate of $46.36 million. Investors should know that pressure pumping is the main contributor to the company’s earnings.

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 Division

The Midland, TX-based company provides hydraulic fracturing, cementing and acidizing functions through the Pressure Pumping segment. The business contributed 98.4% to the company's total revenues in the quarter under review. Service revenues soared 105.6% from the prior-year quarter’s levels to $213.5 million, attributable to higher fleet strength and a stable operating environment following the first-quarter weather woes.

Costs & Expenses

ProPetro reported service cost of $162.8 million for the second quarter, up 138.7% from the year-ago quarter’s level. General and administrative expenses were $17.53 million, down 13.6% from $20.3 million in the prior-year quarter.

Balance Sheet & Capital Expenditures

As of Jun 30, 2021, ProPetro had cash and cash equivalents worth $72.7 million and did not incur any long-term debt. It also had $68 million under its revolving credit facility. Capital expenditures in the June quarter of 2021 summed $31 million, up 160.5% from the second-quarter 2020 level.

Guidance

ProPetro expects full-year capital expenditures in the $115-$130 million range, based on its current and expected activity levels. It allocated approximately $37 million to its Tier IV DGB dual-fuel equipment investment of 90,000 HHP while the rest constitutes maintenance spending, mainly.

ProPetro CEO Phillip Gobe said, “Our commitment to our employees, customers and stakeholders will continue to bolster the value proposition for our company. We believe, the pressure pumping industry is faced with an impending reinvestment cycle that will require innovative solutions to meet the needs of the market. We believe, ProPetro's focused business model, commitment to innovation, capital discipline and conservative capital structure will result in a sustainable company going forward that is well positioned for the future.”

Zacks Rank & Stocks to Consider

ProPetro has a Zacks Rank #3 (Hold), currently. Some better-ranked stocks in the  energy  space are Matador Resources Company (MTDR - Free Report) , Devon Energy Corporation (DVN - Free Report) and Continental Resources, 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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