Carbo Ceramics (CRR) Misses Q1 EPS by 17c

Before the open, Carbo Ceramics (NYSE: CRR) reported Q1 EPS of ($1.07), $0.17 worse than the analyst estimate of ($0.90). Revenue for the quarter came in at $40.6 million versus the consensus estimate of $38.86 million.

CEO Gary Kolstad commented, "Continued low commodity prices further reduced industry activity levels during the first quarter of 2016 as the North American average rig count declined 57% compared to the first quarter of 2015. Given the pressure to reduce costs during this downturn, E&P operators are currently opting for lowest-cost completions, at the risk of compromising production. In some resource plays, E&P operators are also electing not to complete the wells they drilled. These factors negatively impacted our ceramic sales volumes during the quarter.

"As oil and gas activity continued to deteriorate, we witnessed an acceleration in the inventory liquidation of stranded, low-quality Chinese ceramic proppant. Although the near-term impact is negative for our ceramic sales volume, we believe this liquidation benefits us in the long term as the inventory of imported Chinese ceramic proppant is sold off.

"Our efforts to preserve cash and reduce the cost structure of the organization continued during the first quarter. In addition to continued headcount rationalization, we are implementing programs that allow us to further reduce cash compensation.

"We remain focused on our mission to provide technology that increases production and recovery and reduces lease operating expenses. We believe the industry's bias to lowest-cost completions is a direct result of operators merely trying to survive this downturn. From a long-term standpoint, we are very excited about the increasing value

For earnings history and earnings-related data on Carbo Ceramics (CRR) click here.

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