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Liberty (LBRT) Posts Q4 Earnings Beat on Execution, Pricing
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Liberty Energy Inc. (LBRT - Free Report) announced fourth-quarter 2022 earnings per share of 82 cents, which handily beat the Zacks Consensus Estimate of 71 cents and turned around from the year-earlier loss of 31 cents.
The Denver-CO-based oil and gas equipment company’s outperformance reflects the impact of strong execution and increased service pricing, which more than offset weather and holiday-related effects.
Total revenues came in at $1.2 billion, which surpassed the Zacks Consensus Estimate by 2.6% and were 79.2% higher than the year-ago level of $683.7 million.
Meanwhile, fourth-quarter adjusted EBITDA was $295.5 million against the prior-year quarter figure of just $20.6 million.
As part of its shareholder return policy, LBRT repurchased $125 million of its stock at an average price of $15.29 apiece since July and reinstated a quarterly cash dividend of 5 cents in the fourth quarter.
Liberty Energy Inc. Price, Consensus and EPS Surprise
As of Dec 31, Liberty had approximately $43.7 million in cash and cash equivalents. The pressure pumper’s long-term debt of $217.4 million represented a debt-to-capitalization of 12.7%. Further, the company’s liquidity — cash balance plus revolving credit facility — amounted to $351 million.
In the reported quarter, the company spent $116.1 million on its capital program. For the full-year 2022, the figure came in at $428.2 million.
Guidance
Despite growing risk in financial markets due to the aggressive monetary tightening by central banks, Liberty management believes that the energy market remains tight, with China gradually emerging out of its stifling zero-COVID policy and rising global demand for air travel. On top of this, the OPEC+ supply cut, sanctions on Russian oil and limited availability of spare production capacity are likely to further strengthen the demand for North American energy.
This means upstream operators (particularly in North America) are drilling more wells to increase output that has remained depressed over the past two years due to the lack of investment, supply-chain issues, scarcity of labor and equipment attrition. With domestic oil and natural gas output set to reach new highs, the existing fracking capacity seems inadequate to cater to this demand uptick.
In this context, Liberty management sees elevated demand for its next-generation fleet that supports clients’ requirements for quality and reliability. The Zacks Rank #2 (Buy) company is diversifying its offerings with an exciting suite of new technology developments and by partnering with top producers. So, there is s sense that LBRT is set to experience a multi-year cycle of thriving customer demand. This should also translate into “rising free cash flow and strong returns to our shareholders in the years ahead.”
With Liberty belonging to the larger oilfield service industry, let’s see how some of the bigger well-known companies have performed this earnings season.
SLB (SLB - Free Report) , the largest oilfield contractor, announced fourth-quarter 2022 earnings of 71 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 69 cents. SLB recorded total revenues of $7.9 billion, outpacing the Zacks Consensus Estimate by 0.7%.
SLB’s strong quarterly earnings resulted from strong activities in land and offshore resources in North America and Latin America. The company’s board approved a quarterly cash dividend of 25 cents per share, indicating a 43% increase from the last paid dividend.
Smaller rival Halliburton (HAL - Free Report) reported fourth-quarter adjusted net income per share of 72 cents, surpassing the Zacks Consensus Estimate of 67 cents and well above the year-ago quarter profit of 36 cents (adjusted). HAL’s outperformance reflects stronger-than-expected profit from both its divisions.
Meanwhile, revenues of $5.6 billion were 30.5% higher than the corresponding period of 2021 and came in just ahead of the Zacks Consensus Estimate (by some $3 million). North American revenues rose 46.4% year over year to $2.6 billion, while revenues from Halliburton’s international operations were up 19.1% from the year-ago period to nearly $3 billion. Investors should know that HAL has an outsized exposure to the North American land drilling market.
Finally, Baker Hughes (BKR - Free Report) — which along with SLB and HAL makes up the ‘Big Three’ oil services firms — reported fourth-quarter 2022 adjusted earnings of 38 cents per share, missing the Zacks Consensus Estimate of 41 cents due to higher costs and expenses.
Meanwhile, BKR’s revenues for the October-December period totaled $5.9 billion, also underperforming the Zacks Consensus Estimate by 2.6%. The negatives were partially offset by higher contributions from the Oilfield Services and Equipment business unit.
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Liberty (LBRT) Posts Q4 Earnings Beat on Execution, Pricing
Liberty Energy Inc. (LBRT - Free Report) announced fourth-quarter 2022 earnings per share of 82 cents, which handily beat the Zacks Consensus Estimate of 71 cents and turned around from the year-earlier loss of 31 cents.
The Denver-CO-based oil and gas equipment company’s outperformance reflects the impact of strong execution and increased service pricing, which more than offset weather and holiday-related effects.
Total revenues came in at $1.2 billion, which surpassed the Zacks Consensus Estimate by 2.6% and were 79.2% higher than the year-ago level of $683.7 million.
Meanwhile, fourth-quarter adjusted EBITDA was $295.5 million against the prior-year quarter figure of just $20.6 million.
As part of its shareholder return policy, LBRT repurchased $125 million of its stock at an average price of $15.29 apiece since July and reinstated a quarterly cash dividend of 5 cents in the fourth quarter.
Liberty Energy Inc. Price, Consensus and EPS Surprise
Liberty Energy Inc. price-consensus-eps-surprise-chart | Liberty Energy Inc. Quote
Balance Sheet & Capital Expenditure
As of Dec 31, Liberty had approximately $43.7 million in cash and cash equivalents. The pressure pumper’s long-term debt of $217.4 million represented a debt-to-capitalization of 12.7%. Further, the company’s liquidity — cash balance plus revolving credit facility — amounted to $351 million.
In the reported quarter, the company spent $116.1 million on its capital program. For the full-year 2022, the figure came in at $428.2 million.
Guidance
Despite growing risk in financial markets due to the aggressive monetary tightening by central banks, Liberty management believes that the energy market remains tight, with China gradually emerging out of its stifling zero-COVID policy and rising global demand for air travel. On top of this, the OPEC+ supply cut, sanctions on Russian oil and limited availability of spare production capacity are likely to further strengthen the demand for North American energy.
This means upstream operators (particularly in North America) are drilling more wells to increase output that has remained depressed over the past two years due to the lack of investment, supply-chain issues, scarcity of labor and equipment attrition. With domestic oil and natural gas output set to reach new highs, the existing fracking capacity seems inadequate to cater to this demand uptick.
In this context, Liberty management sees elevated demand for its next-generation fleet that supports clients’ requirements for quality and reliability. The Zacks Rank #2 (Buy) company is diversifying its offerings with an exciting suite of new technology developments and by partnering with top producers. So, there is s sense that LBRT is set to experience a multi-year cycle of thriving customer demand. This should also translate into “rising free cash flow and strong returns to our shareholders in the years ahead.”
You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings Snapshot for Oilfield Service Providers
With Liberty belonging to the larger oilfield service industry, let’s see how some of the bigger well-known companies have performed this earnings season.
SLB (SLB - Free Report) , the largest oilfield contractor, announced fourth-quarter 2022 earnings of 71 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 69 cents. SLB recorded total revenues of $7.9 billion, outpacing the Zacks Consensus Estimate by 0.7%.
SLB’s strong quarterly earnings resulted from strong activities in land and offshore resources in North America and Latin America. The company’s board approved a quarterly cash dividend of 25 cents per share, indicating a 43% increase from the last paid dividend.
Smaller rival Halliburton (HAL - Free Report) reported fourth-quarter adjusted net income per share of 72 cents, surpassing the Zacks Consensus Estimate of 67 cents and well above the year-ago quarter profit of 36 cents (adjusted). HAL’s outperformance reflects stronger-than-expected profit from both its divisions.
Meanwhile, revenues of $5.6 billion were 30.5% higher than the corresponding period of 2021 and came in just ahead of the Zacks Consensus Estimate (by some $3 million). North American revenues rose 46.4% year over year to $2.6 billion, while revenues from Halliburton’s international operations were up 19.1% from the year-ago period to nearly $3 billion. Investors should know that HAL has an outsized exposure to the North American land drilling market.
Finally, Baker Hughes (BKR - Free Report) — which along with SLB and HAL makes up the ‘Big Three’ oil services firms — reported fourth-quarter 2022 adjusted earnings of 38 cents per share, missing the Zacks Consensus Estimate of 41 cents due to higher costs and expenses.
Meanwhile, BKR’s revenues for the October-December period totaled $5.9 billion, also underperforming the Zacks Consensus Estimate by 2.6%. The negatives were partially offset by higher contributions from the Oilfield Services and Equipment business unit.