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ProPetro (PUMP) Q1 Earnings Top, to Buy Electric Frack Units

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ProPetro Holding Corp. (PUMP - Free Report) reported strong first-quarter earnings on successful integration of the recently acquired Pioneer Natural Resources’ (PXD - Free Report) pressure pumping assets in the Permian Basin. The company’s impressive operating efficiency also aided the bottom line.

ProPetro’s net income per share came in at 67 cents, ahead of the Zacks Consensus Estimate of 62 cents and the year-ago period's bottom-line figure of 42 cents. Adjusted EBITDA in the first quarter amounted to $150.3 million, increasing substantially from $76.7 million a year ago. In the reported period, ProPetro’s adjusted EBITDA margin was 27.5%, which compares to 20% in the corresponding quarter of 2018.

Keeping with its earlier announcement, the company’s $400 million purchase of Pioneer Natural’s Permian pressure pumping assets led to an increase in ProPetro’s current base to 1,415,000 horsepower across 28 hydraulic fracturing fleets.

ProPetro’s revenues of $546.2 million improved 41.8% year over year and came above the Zacks Consensus Estimate of $524 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 Division

ProPetro, through its Pressure Pumping division, provides hydraulic fracturing, cementing and acidizing functions. The business accounted for 97.4% of the company's total revenues in the quarter under review.

Costs & Expenses

ProPetro reported cost of services of $381.5 million in first-quarter 2019, 28% higher than the year-ago quarter. Meanwhile, general and administrative expenses came in at around $18.5 million, up from $11.9 million in the year-ago period.

Balance Sheet & Capital Expenditure

As of Mar 31, ProPetro had cash and cash equivalents of $79.5 million while its long-term debt was $160 million – for a negative net cash position. The company’s debt-to-capitalization ratio was 15.5%. ProPetro also has $76.6 million available under the revolving credit facility.Capital expenditure for the three months reached $86.1 million.

Guidance & Electric Fracking Foray

ProPetro expects an average of 26 effective fleets in the second quarter, down from 26 in the first quarter of 2019. Importantly, the company is making its foray in the electric fracking technology following the announcement to buy two such DuraStim fleets. To be delivered by late 2019, these 36,000 horsepower DuraStim fleets – boasting of fuel efficiency and lower costs – will be deployed under dedicated agreements with clients.   

Zacks Rank & Stock Picks

ProPetro currently carries a Zacks Rank #3 (Hold). Meanwhile, investors interested in the energy space could look at some better options like Continental Resources, Inc. (CLR - Free Report) and ConocoPhillips (COP - Free Report) that sport a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Over 30 days, the Oklahoma City-based Continental Resources has seen the Zacks Consensus Estimate for 2019 and 2020 increase 25.6% and 17.9%, to $2.80 and $3.49 per share, respectively.

ConocoPhillips has a 100% track of outperforming estimates over the last four quarters at an average rate of 10.5%.

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