Liberty Energy Inc. LBRT reported a second-quarter 2024 adjusted net income of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. The Denver-CO-based oil and gas equipment company’s outperformance reflects the impact of strong execution and enhanced fleet utilization. However, the bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Revenues totaled $1.16 billion, which missed the Zacks Consensus Estimate by 1.12%. The top line was below the prior-year quarter’s level of $1.2 billion by 3.3%.
The company’s adjusted EBITDA was $273.3 million compared with $311.5 million in the year-ago quarter. However, the figure beat our projection of $255.3 million.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased shares worth $30 million at an average price of $20.39 per share in the reported quarter. The company returned $41 million to its shareholders through share repurchases and cash dividends.
Liberty achieved the highest diesel displacement in its history with natural gas-powered digiFleets and set a record for gas substitution in dual fuel technologies. The company expanded the Liberty Power Innovations (“LPI”) portfolio by launching operations in the DJ Basin, including new compression capacity and logistics assets. LBRT also achieved its first CNG sales, supporting Liberty fleets and customer drilling rigs in June.
Liberty Energy Inc. Price, Consensus and EPS Surprise
Liberty Energy Inc. price-consensus-eps-surprise-chart | Liberty Energy Inc. Quote
Costs and Expenses
Liberty reported total costs and expenses of $1018.1 million in the second quarter, an increase of 3% from the year-ago quarter’s level. However, the figure was also lower than our projection of $1,045.7 million.
Balance Sheet & Capital Expenditure
As of Jun 30, Liberty had approximately $30 million in cash and cash equivalents. The pressure pumper’s long-term debt of $147 million represented a debt-to-capitalization of 7.1%. Further, the company’s liquidity — cash balance plus revolving credit facility — amounted to $271 million.
In the reported quarter, LBRT spent $134.1 million on its capital program, higher than our projection of $127.2 million.
Guidance
Despite recent price fluctuations, the company remains optimistic about the long-term prospects of the global oil and gas market.
LBRT anticipates a slight decline in overall North American completion activity in the second half of the year due to front-loading spending by some operators. However, the company expects financial performance to remain consistent with the first half.
Although the pace of fracking activity has slowed slightly, Liberty believes that demand for quality frac crews will tighten in 2025 as oil and gas production increases. The company's focus on innovation and efficiency, combined with its strong supply chain, positions LBRT well to capitalize on these market trends.
Liberty's strategic partnerships with E&P operators and its commitment to delivering superior performance and technical solutions solidify the company’s competitive advantage in the industry. LBRT plans to continue investing in competitive advantages, generate strong cash flow and return value to its shareholders.
Zacks Rank and Key Picks
Currently, LBRT carries a Zacks Rank #5 (Strong Sell).
Investors interested in the energy sector might look at some better-ranked stocks like Sunoco LP SUN, SM Energy Company SM, each sporting a Zacks Rank #1 (Strong Buy) and Coterra Energy Inc. CTRA, carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco is valued at $5.89 billion. It is a major wholesale motor fuel distributor in the United States, distributing 10 plus fuel brands through long-term contracts with more than 10,000 convenience stores, ensuring consistent cash flow.
SUN’s extensive distribution network across 40 states provides a robust and reliable source of income and the Brownsville terminal expansion should add to its revenue diversification.
Denver, CO-based SM Energyis valued at $5.38 billion. The company currently pays a dividend of 72 cents per share, or 1.54%, on an annual basis.
SM, an independent energy company, engages in the acquisition, exploration, development and production of oil, gas and natural gas liquids in the state of Texas.
Coterra Energy is valued at $20.1 billion. The company currently pays a dividend of 84 cents per share, or 3.11%, on an annual basis.
CTRA is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids.
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