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Copper Tip Energy Services
Copper Tip Energy
Vista Projects

Shares of Liberty Oilfield Services jump on earnings beat, outlook

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Shares of Liberty Oilfield Services (LBRT.N) soared on Wednesday after the oilfield services provider topped Wall Street earnings estimates and issued an optimistic outlook for the shale-oil services market.

Liberty’s shares were up roughly 13% at $12.20. Benchmark U.S. oil prices also climbed 1.37% to $63.79 on a smaller-than-expected increase in crude oil inventories that was bullish for demand.

The upbeat report comes after a brutal year for oilfield service companies that saw customers cut budgets and curtail activity to stem losses. Private companies have been increasing output on the rebound in prices, while publicly traded operators remain “steadfast” in their commitment to reduced spending, Chief Executive Chris Wright told investors.

He also told investors margins were on the path to improve by 2022.

Liberty’s revenues rose 114% from the prior quarter to $552 million, above analysts’ estimates of $497.49 million. On an adjusted basis, the company posted a loss of 17 cents per share, lower than analysts’ average estimate of a loss of 22 cents per share, according to Refinitiv IBES data.

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Wright said in an interview following the earnings call that pricing for services was improving slowly and gradually, but has been hampered by competitors who have been willing to work at unprofitable levels to obtain market share. Liberty is unwilling to match those lower prices, he said.

The company’s deployed fracking fleets numbered in the low 30s for the first quarter and will likely stay there this quarter, Wright said. He estimated Liberty was running roughly 15% of all deployed fleets and fracking about 20% of wells in North America.

“They clobbered expectations against a tough backdrop,” analysts for investment firm Tudor Pickering Holt & Co wrote in a note.

Liberty last year acquired rival Schlumberger’s (SLB.N) North American hydraulic fracturing equipment in exchange for a 37% stake in the company.

Liberty said it will begin field-testing its new electric frac fleet, called digiFrac, next month, tapping into a market that has gained greater interest among oil and gas producers seeking to reduce carbon emissions.

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