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Lower Oilfield Activities Hurt Hi-Crush's (HCR) Q1 Earnings

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Hi-Crush Inc. reported net loss of $146.9 million or $1.46 per share in first-quarter 2020, which was wider than net loss of $6.2 million or 6 cents in the year-ago quarter. Barring one-time items, adjusted loss per share was 15 cents.

Revenues declined 8.4% year over year to $146.4 million.

HiCrush Inc. Price, Consensus and EPS Surprise

HiCrush Inc. Price, Consensus and EPS Surprise

HiCrush Inc. price-consensus-eps-surprise-chart | HiCrush Inc. Quote

Q1 Highlights

Total frac sand sold during the quarter was 2,524,232 tons, up 4.7% year over year. Contribution margin per ton sold declined 30.4% year over year to $8.48 in the quarter.  

Volumes sold directly to exploration & production companies ("E&Ps") during the quarter were 63% of the total volume, unchanged year over year.

Financial Position

As of Jun 22, the company had total cash of $34.6 million. It borrowed $25 million from its senior secured revolving credit facility (also known as the ABL Facility) in March and repaid all borrowings under the ABL Credit Facility during second-quarter 2020.

Long-term debt was $3,494 million at the end of the first quarter compared with $528 million at the end of prior-year quarter.

Net cash used by operating activities in the first quarter was $11.9 million.

Outlook

Hi-Crush’s first-quarter results were affected by a decline in crude oil prices and overall oilfield activity, partly due to the coronavirus pandemic. The company has taken various initiatives to align its cost structure with current and expected market demand. Hi-Crush reduced its workforce by around 60% and also lowered capital expenditures for 2020 by nearly 40%. It also idled three production and three terminal facilities during April.

At present, the company is only operating in its Wyeville facility in Wisconsin and one of its Kermit facilities in West Texas, at reduced rates of utilization. Working production capacity of the company is currently reduced to 5.7 million tons per year compared with total nameplate capacity of 17.3 million tons.

Zacks Rank & Key Picks

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

Some better-ranked stocks in the basic materials space are Barrick Gold Corporation (GOLD - Free Report) , Newmont Corporation (NEM - Free Report) and AngloGold Ashanti Limited (AU - Free Report) , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Barrick has an expected earnings growth rate of 54.9% for 2020. The company’s shares have surged 62.8% in the past year.

Newmont has an expected earnings growth rate of 80.3% for 2020. Its shares have returned 53.7% in the past year.

AngloGold has an expected earnings growth rate of 109.9% for 2020. The company’s shares have surged 62.3% in the past year.

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