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U.S. Silica (SLCA) Q1 Earnings and Revenues Beat Estimates

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U.S. Silica Holdings, Inc. recorded first-quarter 2023 earnings of 57 cents per share against a loss of 11 cents in the prior-year quarter.

Adjusted earnings in the reported quarter were 64 cents per share against a loss of 2 cents in the year-ago quarter. It surpassed the Zacks Consensus Estimate of 46 cents.

U.S. Silica generated revenues of $442.2 million, up around 45% year over year, surpassing Zacks Consensus Estimate of $432.2 million. The company benefited from strong demand and improved pricing in the Oil and Gas segment.

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. price-consensus-eps-surprise-chart | U.S. Silica Holdings, Inc. Quote

Segmental Highlights

Revenues in the Oil & Gas division amounted to $300 million in the reported quarter, up 70% year over year and 10% sequentially. Sales volume increased 28% year over year to 3.921 million tons. The Oil & Gas contribution margin rose 16% sequentially and 146% year over year to $109.9 million or $28.03 per ton.

Revenues in the Industrial & Specialty Products division amounted to $142.2 million in the quarter, up 11% year over year and down 2% sequentially. Sales volume decreased 6% year over year to 1.013 million tons. The segment’s contribution margin was $42.9 million or $42.38 per ton in the quarter, down 7% sequentially and up 13% year over year.

Financials

At the end of the quarter, the company’s cash and cash equivalents were $139.5 million, down 41.8% year over year. Long-term debt was $897 million, down 24.7% year over year.

Outlook

For the second quarter of 2023, U.S. Silica noted that its two business segments are well-placed in their respective markets. It has a strong portfolio of Industrial and Specialty Products that serve several essential, high-growth and attractive end markets, backed by a strong pipeline of products under development. It also expects growth in its underlying base business, along with pricing hikes and surcharges, to continue combating inflationary impacts.

In the Oil & Gas segment, the company expects a multi-year growth cycle. The strength in WTI crude oil prices supports an active well completion environment in 2023.

The company is focused on delivering a free cash flow in 2023, deleveraging its balance sheet. It plans to generate significant operating cash flow in the year as well. It forecasts capital expenditure of $50-$60 million for the year.

Price Performance

Shares of U.S. Silica have lost 36.7% in the past year compared with a 20.1% decline of the industry.

 

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Zacks Rank & Other Key Picks

SLCA currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the Basic Materials space are Steel Dynamics, Inc. (STLD - Free Report) , Linde plc (LIN - Free Report) and PPG Industries, Inc. (PPG - Free Report)

Steel Dynamics currently carries a Zacks Rank #2 (Buy). Shares of STLD have gained 19.4% in the past year. It beat the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 10.7% on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Linde, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 9.1% for the current year. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 0.97% upward in the past 60 days. It has a trailing four-quarter earnings surprise of 5.9%, on average. The stock has gained 17.9% over the past year.

PPG Industries currently carries a Zacks Rank #2 and has a projected earnings growth rate of 20.2% for the current year. Shares of PPG have gained 4.8% in the past year. It delivered a trailing four-quarter earnings surprise of 6.8%, on average.


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