Carbo Ceramics (CRR) Tops Q4 EPS by 5c, Offers Outlook

Carbo Ceramics (NYSE: CRR) reported Q4 EPS of ($0.65), $0.05 better than the analyst estimate of ($0.70). Revenue for the quarter came in at $60.3 million versus the consensus estimate of $56.82 million.

Outlook

CEO Gary Kolstad commented on the outlook for CARBO stating, "A key goal in 2018 is continued progress on our transformation strategy to diversify revenue streams. It is our belief that execution on this transformation strategy will result in profitable growth and positive cash from operating activities. Although seasonality will impact the first half of 2018, we believe our revenue and operating cash will show improvement in the first half of 2018 compared to the first half of 2017.

"We believe revenues from the Oil and Gas and Industrial sectors will grow in 2018. Looking at them separately, revenue from the Oil and Gas sector should follow industry activity while revenue from the Industrial sector should see strong double-digit growth year over year.

"If the recent strengthening in oil price continues in 2018, we believe base ceramic demand could improve in 2018. In addition, early indications from clients point to increased ceramic technology sales in our KRYPTOSPHERE and GUARDTM family of products. We anticipate KRYPTOSPHERE HD sales will be down slightly in 2018 due to a decrease in Gulf of Mexico activity, while KRYPTOSPHERE LD sales should exhibit solid growth globally. SCALEGUARD, a scale inhibiting production assurance product, continues to see success through its ability to prevent scale buildup and lower lease operating expense for E&P operators. The pipeline of opportunities is promising and we have been awarded additional work in 2018 for a client's Permian basin wells, which should result in increased revenues compared to 2017.

"Regarding our sand business, first sales for our North East project have begun in January. We will continue to utilize various business models, including an 'asset-lite' model like this, to serve client demand.

"We achieved solid growth in our industrial ceramics business during 2017, and we believe we will significantly grow this business in 2018 and in the foreseeable future. It is important that we continue to expand in the markets we serve today as well as develop new markets. We expect to add additional resources in 2018 to meet our objectives to grow this business by strong double digits again in 2018.

"We expect to develop additional opportunities in mineral processing during 2018, for our underutilized manufacturing plants. Our recent signing of a multi-year agreement to toll process an agricultural product is a positive step forward.

"ASSETGUARDTM, our environmental business, bounced back from the weather impacts of the third quarter. Given the majority of this business is related to the Oil and Gas sector, we believe it should also follow industry activity in 2018. However, we are targeting revenue streams in the Industrial sector and expect strong year-over-year growth in those sales.

"Over multiple decades CARBO has found new and innovative ways to bring value to our clients. We believe 2018 will be an exciting year, filled with meeting the challenges of our existing clients as well as those of new clients. Execution on our transformation strategy continues, and we expect it will result in an enduring, diversified company," Mr. Kolstad concluded.

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

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