A month has gone by since the last earnings report for Liberty Oilfield Services (LBRT). Shares have lost about 9.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Liberty Oilfield Services due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Liberty Energy reported a fourth-quarter 2024 adjusted net income of 10 cents per share, which marginally beat the Zacks Consensus Estimate of 9 cents. This was primarily due to a year-over-year decrease in costs and expenses. However, the bottom line underperformed the year-ago quarter’s reported figure of 54 cents, due to poor equipment and service execution, along with lower activity.
The company's revenues totaled $943.6 million, which missed the Zacks Consensus Estimate by 3.4%. The top line was also below the prior-year quarter’s level of $1.07 billion by 12.2%.
The company’s adjusted EBITDA was $155.7 million, a decrease from $253 million in the year-ago quarter. The figure also missed our prediction of $170.8 million.
LBRT and Cummins Inc., the construction machinery & heavy transportation equipment company, announced their collaboration to introduce the industry’s first natural gas variable speed, large displacement engine for the former’s digiPrime hydraulic fracturing platform. This is set for deployment in the first half of 2025.
Ahead of the earnings release, Liberty Energy’s board of directors declared a quarterly dividend of 8 cents per share to its Class A common shareholders of record as of March 6. The payout, which is unchanged from the previous quarter, will be made on March 20.
The company returned $175 million to its shareholders through the repurchase of 3.8% of shares and quarterly cash dividends in 2024. For the quarter ended, Liberty repurchased and retired 1,581,495 shares of Class A common stock at an average price of $17.88 per share, representing 1% of shares outstanding for a total of around $28 million.
Over the course of the year ended Dec. 31, 2024, the company repurchased and retired 6,320,536 shares at an average price of $20.14 per share, totaling approximately $127 million, which accounted for 3.8% of shares outstanding. Since the repurchase program launched on July 25, 2022, Liberty has repurchased and retired a cumulative 15.1% of shares outstanding. The company currently has about $294 million remaining in repurchase authorization.
The company accelerated the commercial deployment of its digiTechnologies, introducing the innovative technology, which represents a groundbreaking advancement in frac technology by enhancing both efficiency and reducing emissions. It also achieved a record 7,143 pumping hours on a single fleet for the year, averaging nearly 600 hours per month. Additionally, the company expanded Liberty Power Innovations' (“LPI”) natural gas compression, fueling and delivery services infrastructure to its optimal scale. Furthermore, it announced a collaboration between LPI and DC Grid to provide advanced power solutions for commercial fleet electric vehicle hubs and data centers.
For the year ended Dec. 31, 2024, the company achieved a 17% Adjusted Pre-Tax Return on Capital Employed and a 21% Cash Return on Invested Capital.
Liberty reported total costs and expenses of $918.7 million in the fourth quarter, decreasing 3.4% from the year-ago quarter’s level. The figure was also lower than our estimation of $950.2 million.
As of Dec. 31, Liberty had approximately $20 million in cash and cash equivalents. The pressure pumper’s long-term debt of $190.5 million represented a debt-to-capitalization of 8.8%.
Further, the company’s liquidity, cash balance and revolving credit facility amounted to $135 million.
In the reported quarter, this company spent $188.1 million in its capital program, exceeding our estimation of $182 million.
The company expects global oil markets to continue facing uncertainties from geopolitical factors, Chinese economic growth and OPEC+ production decisions, but anticipates no major changes in E&P activity plans. Natural gas demand is expected to remain robust, supported by LNG export capacity growth and an estimated increase in North America’s power consumption.
For the first quarter, LBRT expects a modest sequential increase in revenues and adjusted EBITDA, with solid free cash flow generation from its completions services business despite pricing headwinds. The company also plans significant investment growth in power infrastructure to capitalize on the rising demand for power.
Liberty expects power demand to rise at the fastest pace since the start of 2025, driven by growing needs from data centers, reshoring manufacturing and increases from mining, electrification and other industrial sectors. Management believes that the company is well-positioned to capture this demand with its modular power solutions, offering reliability, redundancy and the ability to scale quickly to meet the growing infrastructure needs for critical projects.
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -63.27% due to these changes.
Currently, Liberty Oilfield Services has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Liberty Oilfield Services has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Liberty Energy Inc. (LBRT) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
免責聲明：投資有風險，本文並非投資建議，以上內容不應被視為任何金融產品的購買或出售要約、建議或邀請，作者或其他用戶的任何相關討論、評論或帖子也不應被視為此類內容。本文僅供一般參考，不考慮您的個人投資目標、財務狀況或需求。TTM對信息的準確性和完整性不承擔任何責任或保證，投資者應自行研究並在投資前尋求專業建議。