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U.S. Pressure Pumping Company Lowers Q4/18 Revenue Guidance

Streetwise Reports
0 Comments|December 14, 2018

A Stifel report explains the reasons behind the guidance revision and shares its 2019 outlook for the oilfield services firm.

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In a Nov. 30 research note, analyst Stephen Gengaro reported Liberty Oilfield Services Inc. (LBRT:NYSE) lowered its Q4/18 guidance, and Stifel revised its Q4 numbers accordingly. However, he expressed optimism for next year, adding, "We continue to expect improvement in Q1/19. Our 2019–2020 estimates are unchanged."

Gengaro explained that two Liberty customers had chosen to take equipment offline sooner than expected. As a result, the company's Q4/18 revenue will sequentially decline from previous guidance by about 10%, according to management estimates. That equates to about a mid-single-digit drop.

In addition, due to customers delaying planned activity until Q1/19 for budgetary purposes, Liberty's Q4/18 annualized EBITDA per fleet also is expected to sequentially decrease by about $5–6 million versus the previously guided $3 million.

Liberty attributed the Q4/18 weakness to "transitory takeaway issues and year-end budget management concerns," which Gengaro noted was consistent with Stifel's expectations.

To reflect changes to Liberty's Q4/18 forecast, Stifel reduced its estimates for Q4/18 earnings per share to $0.33 from $0.43 and Q4/18 EBITDA to $86.3 million from $101.8 million, the analyst pointed out. The investment banking firm, however, left all of its current numbers for 2019 unchanged, given that it expects a "ramp-up in activity throughout the next year on higher budget resets and the resolution of Permian takeaway constraints," noted Gengaro.

Stifel also maintained its Buy rating and $25 per share target price on Liberty, whose current share price is about $16.17.

 

Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from Stifel Nicolaus & Company, Liberty Oilfield Services Inc., November 30, 2018

I, Stephen Gengaro, certify that the views expressed in this research report accurately reflect my personal views about the subject securities or issuers; and I, Stephen Gengaro, certify that no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report. Our European Policy for Managing Research Conflicts of Interest is available at www.stifel.com.

For a price chart with our ratings and any applicable target price changes for LBRT click here.

Stifel or an affiliate expects to receive or intends to seek compensation for investment banking services from Liberty Oilfield Services Inc. in the next 3 months.

Stifel or an affiliate is a market maker or liquidity provider in the securities of Liberty Oilfield Services Inc..

The equity research analyst(s) responsible for the preparation of this report receive(s) compensation based on various factors, including Stifel’s overall revenue, which includes investment banking revenue.

As a multi-disciplined financial services firm, Stifel regularly seeks investment banking assignments and compensation from issuers for services including, but not limited to, acting as an underwriter in an offering or financial advisor in a merger or acquisition, or serving as a placement agent in private transactions.

 


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