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ProPetro (PUMP) Stock Dips 7% Despite Q1 Earnings Beat

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The stock of ProPetro Holding Corp. (PUMP - Free Report) has declined 7.5% since its first-quarter earnings announcement on May 3.

This decline in the stock price came in despite the Permian-focused equipment and service provider of the energy industry posted revenues and earnings that beat the consensus mark. The downtrend shown in the share price could only be attributed to the overall bearishness prevailing in the markets driven by the Federal Reserve policy.

What Did ProPetro’s Earnings Unveil?

ProPetro reported a first-quarter 2022 earnings per share (EPS) of 11 cents, beating the Zacks Consensus Estimate of 4 cents and improving from the year-ago loss of 20 cents. The outperformance could primarily be attributed to improved pricing and increased activity in the reported quarter.

However, revenues of $282.7 million outpaced the consensus mark of $273 million and jumped 75% from the year-ago quarter’s sales of $161.5 million on pricing gains. This was augmented by greater-than-expected revenues from the Pressure Pumping unit – the major contributor to PUMP’s sales. The segment reported revenues of $277.1 million, higher than the consensus mark of $268 million.

This oilfield service provider’s adjusted EBITDA in the first quarter amounted to $67 million, 81% up sequentially from $37 million in the last quarter. Better pricing and increased profitability drove the adjusted EBITDA.

Moreover, ProPetro’s adjusted EBITDA for the Pressure Pumping unit in the December quarter came in at $77 million, which outperformed the Zacks Consensus Estimate of $63 million.

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

ProPetro provides hydraulic fracturing, cementing and acidizing functions through the Pressure Pumping segment. The business contributed a little more than 98% to PUMP's total revenues in the quarter under review. In particular, service revenues from this unit surged about 75% from the prior-year quarter’s levels to $277.1 million, attributable to higher fleet strength and enhanced pricing.

Costs & Financial Position

ProPetro’s first-quarter total costs and expenses were $276.9 million, up 45.7% from the prior-year quarter. The service cost was $197.3 million compared with $123.4 million in the first quarter of 2021.

The company spent $71.7 million on capital expenditure. In the first quarter, the company booked $38.9 million of negative free cash flows.

As of Mar 31, the Midland, TX-based operator had approximately $70.8 million in cash and cash equivalents and no debt. Including cash and $56 million under its revolving credit facility, ProPetro had total liquidity of $127 million at the end of March 2022.

Guidance

ProPetro’s guidance for the second-quarter average effective fleet utilization is between 13.5 and 14.5 fleets.

The company mentioned that its outlook for the full-year CapEx spending remains unchanged at the $250 million-$300 million range, which includes $9 million in maintenance expenses per fleet.

Zacks Rank & Other Stock Picks

ProPetro currently has a Zacks Rank #2 (Buy). Investors interested in the energy space might also look at some other top-ranked stocks like — PBF Energy (PBF - Free Report) , Murphy USA (MUSA - Free Report) and Vista Oil & Gas (VIST - Free Report) — each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PBF Energy’s stock has increased 98.9% in a year. The Zacks Consensus Estimate for PBF Energy’s 2022 earnings has been revised upward by about 150% over the past 60 days from $2.26 to $5.65 per share.

The Zacks Consensus Estimate for PBF’s 2022 earnings is projected at $5.65 per share, up about 326% from the projected year-ago loss of $2.50.

Murphy USA is valued at around $6.2 billion. The Zacks Consensus Estimate for Murphy USA’s 2022 EPS has been revised upward by about 40.4% over the past 60 days from $11.42 to $16.04.

Murphy USA beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being 49.1%. MUSA stock has increased 82.4% in a year.

The Zacks Consensus Estimate for Vista’s 2022 earnings is projected at $1.67 per share, up about 209.3% from the projected year-ago earnings of 54 cents.

Vista’s stock has rallied 196.9% in a year. The Zacks Consensus Estimate for VIST’s 2022 earnings has been revised about 7.7% upward over the past 60 days from $1.55 per share to $1.67.