Forbes Energy Services Ltd.
), an oilfield services contractor, reported disappointing
results for the fourth quarter of 2012, with loss per share of 22
cents, much wider than the Zacks Consensus Estimate of a loss of
17 cents. Increased pricing pressures coupled with reducing
demand negatively impacted earnings
In the fourth quarter of 2012, total sales for Forbes Energy were
$107.0 million, down 14.1% year over year, primarily due to
shorter daylight hours and holidays. Revenue also missed the
Zacks Consensus Estimate of $110.0 million by 2.7%.
In the reported quarter, revenue from the
segment was recorded at $48.6 million, a decrease of 4.9%
compared with the year-ago quarter. Fewer 24-hour rigs working
led to the decline.
Fluid Logistics and Other
segment came in at $58.5 million, facing a decline of 20.5%
year-over-year, due to a reduction in the truck hours.
Operating profit in the reported quarter dropped by a whopping
98.1% to $0.3 million from the $18.1 million reported in the
year-ago quarter. This decrease was attributable to a higher
insurance expense as well as higher wages and fuel charges.
Operating margin in the quarter was recorded at 0.3% compared
with 14.5% in the fourth quarter of 2011.
Balance Sheet/Cash Flow:
Exiting the fourth quarter 2012, Forbes Energy's cash and cash
equivalents were approximately $17.6 million, compared with $5.3
million in the previous quarter. Total debt balance stood at
$306.3 million against $296.1 million in the preceding
Capital expenditure in the quarter amounted to $8.7
Forbes Energy expects capital expenditure in 2013 to be roughly
$20.0-$23.0 million. The company also predicts a stable pricing
environment in 2013.
Forbes Energy currently carries a Zacks Rank #3 (Hold). Other
stocks worth a look in the oil & gas equipment & services
); carrying a Zacks Rank #1 (Strong Buy); and
Worthington Industries Inc.
) carrying a Zacks Rank #2 (Buy).
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