ProPetro Holding Corp. PUMP reported second-quarter 2024 loss per share of 3 cents, which missed the Zacks Consensus Estimate for earnings of 8 cents. Moreover, the bottom line declined from the year-ago quarter’s reported profit of 34 cents.
Revenues of $357 million missed the consensus mark of $362 million. The figure also decreased 18% from the year-ago quarter’s level of $435.2 million. This was due to a year-over-year decline in service revenues from hydraulic fracturing and wireline operations.
Adjusted EBITDA amounted to $66.1 million, down 29.2% from $93.4 million reported in the previous quarter. This underperformance was due to customer delays, pricing pressures on Tier II diesel assets and weather impacts.
The company expanded its share repurchase program on Apr 24, increasing the authorization to $200 million and extending it through May 2025. In the quarter, 2.5 million shares were repurchased for $23 million, bringing the total shares retired since program inception to 11.3 million or approximately 10% of outstanding shares.
ProPetro Holding Corp. Price, Consensus and EPS Surprise
ProPetro Holding Corp. price-consensus-eps-surprise-chart | ProPetro Holding Corp. Quote
Pressure Pumping
ProPetro provides hydraulic fracturing, cementing and acidizing functions through its Pressure Pumping segment. The business contributed 100% to PUMP's total revenues in the quarter under review.
Service revenues from this unit decreased 18% to $357 million from the prior-year quarter’s level. Additionally, the figure was lower than our estimate of $377.5 million.
Costs & Financial Position
Total costs and expenses were $357.6 million for the second quarter, down 17.9% from the prior-year quarter’s level. The cost of services (exclusive of depreciation and amortization) was $265.8 million compared with $297.8 million in the comparable period of 2023. Additionally, the loss on disposal of assets totaled $3.3 million compared with $14.8 million in the comparable period of 2023.
The company recorded $32 million in capital expenditure. The majority of capital expenditures incurred in this quarter were allocated to maintaining and upgrading equipment used in FORCESM electric hydraulic fracturing fleet deployments.
As of Jun 30, PUMP had $66.9 million in cash and cash equivalents and $45 million in borrowings under its ABL Credit Facility. Total liquidity was $145 million, including $78 million in available credit at June-end. Long-term debt amounted to $45 million. The total debt-to-total capital was 4.4%.
Net cash provided by operating activities increased to $104.9 million in this quarter, up from $74.8 million in the last quarter. Free Cash Flow increased to approximately $47.9 million from $41 million in the prior quarter. The company used $57 million in net cash for investing activities in the second quarter of 2024. Of this amount, $21 million was allocated to the acquisition of AquaProp.
Key Points
Midland, TX-based company acquired Aqua Prop LLC, an innovative provider of cost-effective wet sand solutions. The company has four FORCESM electric hydraulic fracturing fleets under contract, out of which three are currently in operation, with leading customers. A fifth FORCESM electric fleet was ordered for delivery and deployment in 2024. Effective frac fleet utilization improved to 15.5 from 15 fleets in the prior quarter.
Guidance
The company expects to reduce full-year 2024 capital expenditure guidance to be between $175 million to $200 million, down from the prior guided range of $200-$250 million. PUMP anticipates operating 14 active frac fleets in the third quarter of 2024.
ProPetro’s management expects the second half of the year to mirror the successful first six months, driven by its diversified fleet and exceptional operational team. The PUMP's FORCESM electric equipment remains in high demand, exceeding the current supply. Coupled with the ongoing integration of recent acquisitions, PUMP is expected to boost earnings further.
PUMP currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Important Energy Earnings So Far
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
Liberty Energy LBRT, the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
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 the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company HAL, an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
Meanwhile, energy infrastructure provider Kinder Morgan KMI reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter discounted cash flow (DCF) was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter-end. For the full year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.
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