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U.S. Silica (SLCA) Q1 Earnings Top, Revenues Trail Estimates

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U.S. Silica Holdings, Inc. (SLCA - Free Report) recorded a profit of $31.3 million or 39 cents per share in the first quarter of 2018, a significant rise from $2.5 million or 3 cents in the year-ago quarter.

Barring one-time items, the company’s adjusted earnings came in at 54 cents per share. It beat the Zacks Consensus Estimate of 45 cents.

U.S. Silica reported revenues of $369.3 million, up around 51% year over year. The figure however, missed the Zacks Consensus Estimate of $373 million.

U.S. Silica Holdings, Inc. Price, Consensus and EPS Surprise

U.S. Silica Holdings, Inc. Price, Consensus and EPS Surprise | U.S. Silica Holdings, Inc. Quote

Segment Highlights

Revenues for the Oil & Gas division were $312.9 million in the quarter, a roughly 62% year-over-year surge. Overall sales volume soared 28% in the quarter to around 3.252 million tons from 2.532 million tons in the prior-year quarter.

Revenues for the Industrial and Specialty Products (“ISP”) division came in at $56.4 million in the quarter, up 9% year over year. Overall sales volume rose 2% to around 0.877 million tons.

Financials

U.S. Silica had $329.5 million in cash and cash equivalents at the end of first quarter, down roughly 50.1% year over year.

Long-term debt dipped roughly 0.2% to $506.6 million and total debt was $510.9 million. Capital spending in the first quarter was $72.3 million.

Outlook

U.S. Silica continues to expect its capital expenditures for 2018 to be in the range of $300-$350 million, mainly due to the completion of capacity expansion projects that started last year and continued investments in Sandbox.

For the second quarter, the company expects volumes in the Oil & Gas segment to rise in the range of 10-15%. Moreover, the company expects spot pricing to continue to increase in the second quarter at mid-single digit clips. It also expects improved pricing and volumes for Sandbox in the second quarter.

For the ISP unit, the company expects a strong second quarter with higher volumes and margins, which is likely to be driven by a favorable product mix and positive seasonality.

Price Performance

U.S. Silica’s shares have lost 23.5% over the last three months, significantly underperforming 4.4% decline recorded by its industry.



 

Zacks Rank & Stocks to Consider

U.S. Silica currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , United States Steel Corporation (X - Free Report) and Kronos Worldwide Inc. (KRO - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have soared 25% over a year.

U.S. Steel has an expected long-term earnings growth rate of 8%. Its shares have rallied 60.1% over a year.

Kronos has an expected long-term earnings growth rate of 5%. Its shares have surged 37.5% over a year.

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