Liberty Energy (LBRT) Tops Q1 EPS by 7c
Liberty Energy (NYSE: LBRT) reported Q1 EPS of $0.90, $0.07 better than the analyst estimate of $0.83. Revenue for the quarter came in at $1.26 billion versus the consensus estimate of $1.25 billion.
Outlook
Tight frac markets persist in North America. Domestic natural gas markets are now beginning to show signs of a widely anticipated slowdown, but the softness is likely transitory ahead of a wave of LNG and Mexico pipeline export growth. The vast majority of frac services are weighted toward oilier basins and are working to simply maintain production levels.
The fundamental outlook for North American hydrocarbons is strong, as constrained global oil supply is confronted by rising demand in emerging markets and a gradual recovery in China. North American E&P companies have demonstrated strength and discipline amidst economic turbulence. Development programs are largely unchanged, as production has been roughly aligned with oil demand in the years since the pandemic and E&P companies are financially healthier relative to prior cycles.
In early spring, financial sector stresses and the heightened perceived recessionary risk on global oil demand resulted in an abrupt fall in oil prices. Concerns have since eased as markets digested the news and economic data showed resiliency. A surprise collective and proactive output cut from OPEC+ members coupled with falling Russian supply drove oil prices back to pre-bank stress levels.
“As we look ahead, early year strength continues into the second quarter, where we are seeing stable pricing and normal seasonality,” commented Mr. Wright. “Frac markets remain at high utilization levels, and robust demand in larger, oilier basins likely offsets softer conditions isolated to gas basins.”
“Liberty’s success is based on innovation, and today we are at the forefront of a generational shift in frac technology. During the first quarter, we deployed our first digiFleetSM comprising digiFracSM electric pumps with no disruption to completions operations. The crew quickly reached a milestone achievement of 1,291 minutes of pumping time in a day, or 90% of total available minutes,” continued Mr. Wright. “With our revolutionary pump technology, built for purpose mobile power generation, and fuel supply, we are now seeing the early benefits of five years of innovation and integration coming to fruition.”
“Liberty Power Innovations expands our vertical integration strategy alongside our sand, logistics, manufacturing and design capabilities. We launched LPI with the initial focus on compressed natural gas (CNG) and field gas processing services that support the secular demand shift towards natural gas as the primary fuel of choice. Dependable access to fuel is critical to maintaining highly efficient frac operations that drive Liberty’s industry-leading performance and returns,” continued Mr. Wright. “We are confident in our ability to generate strong returns, while balancing investment in the future and a strong capital return program.”
For earnings history and earnings-related data on Liberty Oilfield Services (LBRT) click here.