C&J Energy (CJ) Tops Q4 EPS by 1c

C&J Energy (NYSE: CJ) reported Q4 EPS of ($0.27), $0.01 better than the analyst estimate of ($0.28). Revenue for the quarter came in at $490.6 million versus the consensus estimate of $492.27 million.

Forward Outlook

Focusing on the first quarter of 2019, our current outlook is mixed. We expect some utilization improvement in our fracturing business primarily due to the refreshed capital expenditure budgets of our customers and having more fleets dedicated to large, efficient customers. We have experienced a slow start to the year in our wireline and pumping businesses and the recent reduction in the drilling rig count combined with a more competitive services environment has resulted in some softness in customer demand for our cementing services. In response to these challenges, we remain focused on further reducing our cost structure, efficiently deploying our asset base to meet evolving customer demand and reducing capital spending to be more in line with our maintenance capital needs. We expect additional improvement in our Well Support Services segment due to increased market share, the full quarter's impact of new contract activity gained in the prior quarter, and customer appetite to deploy capital to increase production through well repair and maintenance activities.

With regards to the full year 2019, we expect market conditions to progressively improve, which should result in gradual improvement in our Completion Services segment throughout the year. The steady ramp in completion activity should result in utilization improvement in our fracturing business and improved demand for our wireline and pumping services. We expect our Well Support Services segment to steadily improve as customers value our record of providing superior service quality and safety, and as customers continue to allocate more capital to workover and maintenance activities. In our Well Construction and Intervention Services segment, we expect the fluctuations in the drilling rig count to affect our cementing business, but our coiled tubing business should remain steady as demand for large diameter coil remains strong.

For earnings history and earnings-related data on C&J Energy (CJ) click here.

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