Carbo Ceramics (CRR) Tops Q4 EPS by 12c

Carbo Ceramics (NYSE: CRR) reported Q4 EPS of ($0.57), $0.12 better than the analyst estimate of ($0.69). Revenue for the quarter came in at $27.7 million versus the consensus estimate of $24.55 million.

CEO Gary Kolstad commented, "We are pleased with the 44% sequential revenue growth we experienced in the fourth quarter. We also continue to be excited about our new technology sales, which increased over the course of the year. As we look forward into 2017, we expect to see strong double-digit growth in our new technology sales. With the improving industry activity outlook, and with continued commodity price support, we are looking forward to improving trends in our business, which we expect will have a positive effect on EBITDA.

\In 2016, we managed through a difficult and challenging market by focusing on what we could control – reducing costs, strengthening the balance sheet, and increasing technology adoption by E&P operators. Despite a significant decline in industry activity during 2016, we gained new clients using our oilfield technology products, which underscores the value of our technology portfolio. In addition, we are executing on a strategic initiative to increase our future industrial technology sales.

\We were successful in significantly reducing our cost base during 2016. Despite a substantial drop in revenue, we experienced less than 20%1 negative fall through in Adjusted EBITDA. This gives us confidence in the operating leverage we have going forward as the industry recovers.

"Generating positive cash remains our primary financial goal, and we continue to take steps that will contribute to positive cash flow over the long term. During the fourth quarter, we terminated a railcar lease contract for $1.5 million, which will eliminate a total of $7 million of lease payments over the next five years.

"The current commodity price environment continues to lead E&P operators to generally focus on the lowest upfront completion cost. However, some operators are returning to ceramic proppant and highlighting its performance in contrast to wells completed with sand that have not produced expected results. Reservoir conditions in some basins particularly benefit from the use of a high quality, high conductivity ceramic proppant to achieve higher EUR, resulting in better well economics," Mr. Kolstad said.

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

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