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Hi-Crush (HCLP) Misses Q2 Earnings and Revenue Estimates

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Hi-Crush Partners LP (HCLP - Free Report) reported net income of $68 million or 67 cents per share in second-quarter 2018, up from $16.4 million or 18 cents in the year-ago quarter. However, earnings missed the Zacks Consensus Estimate of 77 cents.

Revenues surged roughly 83.8% year over year to $248.5 million, driven by improved pricing and increased volumes. The figure narrowly missed the Zacks Consensus Estimate of $248.7 million.

In the second quarter, contribution margin was $30.94 per ton sold compared with $16.73 in the year-ago quarter.

Hi-Crush Partners LP Price, Consensus and EPS Surprise

 

Hi-Crush Partners LP Price, Consensus and EPS Surprise | Hi-Crush Partners LP Quote

Operational Update

On Jul 23, 2018, the company inked a purchase deal to acquire FB Industries Inc for roughly $60 million along with potential additional performance based payments. The move makes it the industry's sole vertically-integrated provider of proppant logistics solutions and frac sand, with a diverse production base. The deal is expected to close in the third quarter, subject to customary closing conditions.

Hi-Crush expects to deploy 15-20 FB silo systems by the end of this year.

At the end of the second quarter, the company had 14 PropStream crews in the Marcellus/Utica plays and the Permian Basin, up 16.7% from 12 crews at the end of the first quarter.  

Financial Position

As of Jun 30, 2018, the company had $25.4 million in cash and $103.6 million in available capacity under its Revolving Credit Agreement compared with $85.7 million in cash and available capacity as of Jun 30, 2017.

It had total outstanding long-term debt of $194.9 million as of Jun 30, 2018 compared with $194.5 million a year ago.

Dividend Distribution

On Jul 20, the company declared quarterly cash distribution of 75 cents per unit on all common unit, up from the previous quarterly cash distribution of 22.5 cents. The dividend will be paid on Aug 14 to unitholders of record as of Aug 3.

Outlook

For third-quarter 2018, the company expects total sales volume to increase to the range of 3-3.2 million tons. Per the partnership, the projected volumes sold reflect the expectation of consistent completions activity. Also, it expects pricing to improve slightly in the third quarter of 2018.
Hi-Crush also stated that the outlook for frac sand remains positive and witnesses strong and increasing demand across its product portfolio.

Price Performance

Hi-Crush’s shares have gained 21% over the past three months compared with a 1.8% rise of the industry.

 



Zacks Rank & Stocks to Consider

Hi-Crush currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space are KMG Chemicals, Inc , Ingevity Corporation (NGVT - Free Report) and Celanese Corporation (CE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have returned 45.5% in a year.

Ingevity has an expected long-term earnings growth rate of 12%. Its shares have rallied 68.6% in a year.

Celanese has an expected long-term earnings growth rate of 10%. Its shares have gained 22% in a year.

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