Yahoo Finance Liberty's (LBRT) Q1 Earnings Preview: Key Things To Consider
Liberty Energy LBRT is set to release first-quarter results on Apr 19. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 81 cents per share on revenues of $1.3 billion.
Let’s delve into the factors that might have influenced the provider of hydraulic fracturing and other auxiliary services to onshore exploration and production companies in North America in the March quarter. But it’s worth taking a look at LBRT’s previous-quarter performance first.
Highlights of Q4 Earnings & Surprise History
In the last reported quarter, the Denver, CO-based oilfield service company beat the consensus mark due to the impact of strong execution and increased service pricing, which more than offset weather and holiday-related effects. LBRT had reported earnings per share of 82 cents, 11 cents above the Zacks Consensus Estimate. Revenues of $1.2 billion generated by the firm also came in 2.6% above the Zacks Consensus Estimate.
LBRT beat the Zacks Consensus Estimate in each of the last four quarters, which resulted in an earnings surprise of 81.5%, on average. This is depicted in the graph below:
Liberty Energy Inc. Price and EPS Surprise
Liberty Energy Inc. price-eps-surprise | Liberty Energy Inc. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the first-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 2,800% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 59.1% increase from the year-ago period.
Factors to Consider
Despite growing risk in financial markets due to the aggressive monetary tightening by central banks, Liberty management believes that the energy market remains tight, with China emerging out of its stifling zero-COVID policy and rising global demand for air travel. On top of this, the OPEC+ supply cut, sanctions on Russian oil and limited availability of spare production capacity are likely to further strengthen the demand for North American energy.
This means upstream operators (particularly in North America) are drilling more wells to increase output that has remained depressed over the past two years due to the lack of investment, supply-chain issues, scarcity of labor and equipment attrition. With domestic oil and natural gas output set to reach new highs, the existing fracking capacity seems inadequate to cater to this demand uptick. In this context, Liberty management sees elevated demand for its next-generation fleet that supports clients’ requirements for quality and reliability.
The abovementioned factors should buoy LBRT’s first-quarter revenues and cash flows.
On a somewhat bearish note, the increase in LBRT’s costs might have dented the company’s to-be-reported bottom line. The company’s fourth-quarter total operating expenses totaled $1 billion, up 37.5% from the year-ago period. The upward cost trajectory is likely to have continued in the fourth quarter due to the prevailing inflationary environment.
What Does Our Model Say?
The proven Zacks model does not conclusively show that LBRT is likely to beat estimates in the first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -11.48%.
Zacks Rank: Liberty currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Liberty, here are some firms from the energy space that you may want to consider on the basis of our model:
Marathon Petroleum MPC has an Earnings ESP of +9.16% and a Zacks Rank #2. The firm is scheduled to release earnings on May 2.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MPC’s 2023 earnings has been revised 15.7% upward over the past 60 days. Valued at around $58.3 billion, Marathon Petroleum has gained 45.1% in a year.
Murphy Oil MUR has an Earnings ESP of +4.77% and a Zacks Rank #3. The firm is scheduled to release earnings on May 3.
For 2023, Murphy Oil has a projected earnings growth rate of 5.6%. Valued at around $6.1 billion, MUR has lost 10.7% in a year.
TechnipFMC FTI has an Earnings ESP of +29.63% and a Zacks Rank #3. The firm is scheduled to release earnings on Apr 27.
For 2023, TechnipFMC has a projected earnings growth rate of 1,766.7%. Valued at around $6 billion, FTI has gained 55.4% in a year.
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TechnipFMC plc (FTI) : Free Stock Analysis Report
Murphy Oil Corporation (MUR) : Free Stock Analysis Report
Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report
Liberty Energy Inc. (LBRT) : Free Stock Analysis Report
