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Liberty (LBRT) Q1 Loss Narrower Than Expected, to Rebrand
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Shares of Liberty Oilfield Services Inc. (LBRT - Free Report) surged to a 52-week high of $20.05 on Thursday after it reported a much narrower-than-expected first-quarter loss the day before.
The Denver-CO-based oil and gas equipment company posted loss per share of 3 cents, 81.3% narrower than the Zacks Consensus Estimate and far improved from the year-ago loss of 21 cents.
The outperformance reflects the impact of strong execution, higher activity and increased service pricing, which more than offset rising costs.
Total revenues came in at $792.8 million, ahead of the Zacks Consensus Estimate of $743 million and 43.6% above the year-ago level of $552 million.
Meanwhile, first-quarter adjusted EBITDA was $91.8 million against the prior-year quarter figure of $31.7 million.
LBRT further announced that it is rebranding as Liberty Energy. The company said the new name is intended to reflect its transition to an all-round provider of well-completion services.
Liberty Oilfield Services Inc. Price, Consensus and EPS Surprise
As of Mar 31, Liberty had approximately $32.9 million in cash and cash equivalents. The pressure pumper’s long-term debt of $211.2 million represented a debt-to-capitalization of 14.6%. Further, the company’s liquidity — cash balance, plus revolving credit facility — amounted to $222 million.
In the reported quarter, the company spent $90.1 million on its capital program.
Guidance
The Ukraine conflict and sweeping international curbs on Moscow have aggravated the oil supply shortage. This means upstream operators are drilling more wells to increase output that has remained depressed over the past two years due to lack of investment, supply chain issues, scarcity of labor and equipment attrition. In this context, Liberty management sees strong commodity prices driving frac service usage through the remainder of 2022. With crude demand set to keep increasing and eventually surpass pre-covid record, most of the domestic fracking capacity is on the verge of being exhausted. In the second quarter, the Zacks Rank #3 (Hold) company sees some 10% sequential revenue growth, plus higher margins on improved activity and pricing. However, cost inflation might dent some of that.
With Liberty belonging to the larger oilfield service industry, let’s see how some of the bigger well-known companies have performed so far this earnings season.
Schlumberger (SLB - Free Report) , the largest oilfield contractor, announced first-quarter earnings of 34 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 32 cents. SLB recorded total revenues of $6 billion, outpacing the Zacks Consensus Estimate by 1.2%.
Schlumberger’s strong quarterly earnings resulted from strong drilling activities in North America, Latin America and the Middle East. Higher evaluation and intervention activities across the international offshore markets also buoyed the company’s first-quarter results. In more good news for investors, SLB raised its quarterly dividend by 40% to 17.5 cents per share (or 70 cents per share annualized).
Smaller rival Halliburton (HAL - Free Report) reported first-quarter adjusted net income per share of 35 cents, in line with the Zacks Consensus Estimate. The company had reported a profit of 19 cents in the year-ago quarter. HAL’s performance reflects stronger-than-expected profit from its Drilling and Evaluation division.
Meanwhile, revenues of $4.3 billion were 24.1% higher than the year-ago quarter and came ahead of the Zacks Consensus Estimate by 2.4%. North American revenues rose 37.1% year over year to $1.9 billion, while revenues from Halliburton’s international operations were up 15.2% from the year-ago period to $2.4 billion.
On the other hand, Baker Hughes (BKR - Free Report) — which along with SLB and HAL makes up the ‘Big Three’ oil services firms — reported first-quarter adjusted earnings of 15 cents per share, missing the Zacks Consensus Estimate of 19 cents. BKR’s revenues for the January-March period totaled $4.8 billion, also underperforming the Zacks Consensus Estimate by 3.2%.
The lower-than-expected results were caused by a decline in cost productivity and inflation pressures in the Digital Solutions unit. This was partly offset by a higher contribution from Baker Hughes’ Oilfield Services business division.
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Liberty (LBRT) Q1 Loss Narrower Than Expected, to Rebrand
Shares of Liberty Oilfield Services Inc. (LBRT - Free Report) surged to a 52-week high of $20.05 on Thursday after it reported a much narrower-than-expected first-quarter loss the day before.
The Denver-CO-based oil and gas equipment company posted loss per share of 3 cents, 81.3% narrower than the Zacks Consensus Estimate and far improved from the year-ago loss of 21 cents.
The outperformance reflects the impact of strong execution, higher activity and increased service pricing, which more than offset rising costs.
Total revenues came in at $792.8 million, ahead of the Zacks Consensus Estimate of $743 million and 43.6% above the year-ago level of $552 million.
Meanwhile, first-quarter adjusted EBITDA was $91.8 million against the prior-year quarter figure of $31.7 million.
LBRT further announced that it is rebranding as Liberty Energy. The company said the new name is intended to reflect its transition to an all-round provider of well-completion services.
Liberty Oilfield Services Inc. Price, Consensus and EPS Surprise
Liberty Oilfield Services Inc. price-consensus-eps-surprise-chart | Liberty Oilfield Services Inc. Quote
Balance Sheet & Capital Expenditure
As of Mar 31, Liberty had approximately $32.9 million in cash and cash equivalents. The pressure pumper’s long-term debt of $211.2 million represented a debt-to-capitalization of 14.6%. Further, the company’s liquidity — cash balance, plus revolving credit facility — amounted to $222 million.
In the reported quarter, the company spent $90.1 million on its capital program.
Guidance
The Ukraine conflict and sweeping international curbs on Moscow have aggravated the oil supply shortage. This means upstream operators are drilling more wells to increase output that has remained depressed over the past two years due to lack of investment, supply chain issues, scarcity of labor and equipment attrition. In this context, Liberty management sees strong commodity prices driving frac service usage through the remainder of 2022. With crude demand set to keep increasing and eventually surpass pre-covid record, most of the domestic fracking capacity is on the verge of being exhausted. In the second quarter, the Zacks Rank #3 (Hold) company sees some 10% sequential revenue growth, plus higher margins on improved activity and pricing. However, cost inflation might dent some of that.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings Snapshot for Oilfield Service Providers
With Liberty belonging to the larger oilfield service industry, let’s see how some of the bigger well-known companies have performed so far this earnings season.
Schlumberger (SLB - Free Report) , the largest oilfield contractor, announced first-quarter earnings of 34 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 32 cents. SLB recorded total revenues of $6 billion, outpacing the Zacks Consensus Estimate by 1.2%.
Schlumberger’s strong quarterly earnings resulted from strong drilling activities in North America, Latin America and the Middle East. Higher evaluation and intervention activities across the international offshore markets also buoyed the company’s first-quarter results. In more good news for investors, SLB raised its quarterly dividend by 40% to 17.5 cents per share (or 70 cents per share annualized).
Smaller rival Halliburton (HAL - Free Report) reported first-quarter adjusted net income per share of 35 cents, in line with the Zacks Consensus Estimate. The company had reported a profit of 19 cents in the year-ago quarter. HAL’s performance reflects stronger-than-expected profit from its Drilling and Evaluation division.
Meanwhile, revenues of $4.3 billion were 24.1% higher than the year-ago quarter and came ahead of the Zacks Consensus Estimate by 2.4%. North American revenues rose 37.1% year over year to $1.9 billion, while revenues from Halliburton’s international operations were up 15.2% from the year-ago period to $2.4 billion.
On the other hand, Baker Hughes (BKR - Free Report) — which along with SLB and HAL makes up the ‘Big Three’ oil services firms — reported first-quarter adjusted earnings of 15 cents per share, missing the Zacks Consensus Estimate of 19 cents. BKR’s revenues for the January-March period totaled $4.8 billion, also underperforming the Zacks Consensus Estimate by 3.2%.
The lower-than-expected results were caused by a decline in cost productivity and inflation pressures in the Digital Solutions unit. This was partly offset by a higher contribution from Baker Hughes’ Oilfield Services business division.