Liberty Energy Inc. (LBRT Quick QuoteLBRT - Free Report) reported earnings of 90 cents per share for first-quarter 2023, 12.5% higher than the Zacks Consensus Estimate. It also outperformed the year-ago quarter’s loss of 3 cents per share. This improvement was primarily due to strong equipment and services execution, and higher activity in the reported quarter.

Total revenues came in at $1.3 billion, marginally beating the Zacks Consensus Estimate (by 0.8%) and 59.2% higher than the prior-year quarter’s level of $792.8 million.

Adjusted EBITDA was $329.9 million compared with $91.8 million reported in the year-ago quarter.

Ahead of the earnings release, Liberty Energy’s board of directors announced a cash dividend of 5 cents per common share, payable on Jun 20, 2023, to stockholders of record as of Jun 6, 2023.

Balance Sheet & Capital Expenditure

As of Mar 31, LBRT had approximately $20.9 million in cash and cash equivalents. Its long-term debt of $210 million represented a debt-to-capitalization of 11.7%. The company’s liquidity — cash balance, plus revolving credit facility — amounted to $308 million.

In the reported quarter, Liberty Energy spent $129.7 million on its capital program.

Guidance

The company plans to expand its Liberty Power Innovations vertical integration strategy, including sand, logistics, manufacturing and designing capabilities. It mainly focuses on compressed natural gas and field gas processing services to meet the increasing demand for natural gas.

Liberty Energy maintains a positive outlook for the North American hydrocarbons market. It does so due to rising demand in emerging markets and a gradual recovery in China, despite the temporary softness in domestic natural gas markets and fracking markets. High utilization levels and robust demand in larger, oilier basins are expected to offset the softer conditions in gas basins.

The company anticipates North America exploration and production (E&P) companies to remain strong and disciplined in their development programs. It expects them to do so even during economic turbulence like an unexpected fall in oil prices due to financial sector stress and recessionary risk on global oil demand.

However, concerns regarding such risks have eased as a surprise OPEC+ output cut and a falling Russian supply drove oil prices back to pre-stress levels.

Zacks Rank and Key Picks

Liberty Energy provides hydraulic services and technologies to onshore oil and natural gas E&P companies in North America. Currently, LBRT carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some better-ranked stocks like Par Pacific (PARR Quick QuotePARR - Free Report) and Marathon Petroleum (MPC Quick QuoteMPC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy), and Ranger Energy Services (RNGR Quick QuoteRNGR - Free Report) , holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Par Pacific: PARR is worth approximately $1.63 billion. Its shares have risen 82.1% in the past year.

The company manages and maintains interests in energy and infrastructure businesses. Its operating segment consists of refining, retail and logistics.

Marathon Petroleum: MPC is valued at around $58.02 billion. It delivered an average earnings surprise of 20.91% for the last four quarters and its current dividend yield is 2.30%.

The company currently has a forward P/E ratio of 6.36. In comparison, its industry has an average forward P/E of 9.10, which means MPC is trading at a discount to the group.

Ranger Energy Services: RNGR is valued at around $242.99 million. In the past year, its shares have gained 16.8%.

Ranger Energy Services currently has a forward P/E ratio of 5.30. In comparison, its industry has an average forward P/E of 11.60, which means RNGR is trading at a discount to the group.