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Basic Energy Services’ 2Q17 Earnings Beat Estimates

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Basic Energy Services’ 2Q17 revenues

Basic Energy Services (BAS) released its 2Q17 financial results on July 27, 2017. The company recorded ~$213 million in revenues in 2Q17, up ~17% from the $182 million it recorded in 1Q17. Basic Energy Services’ revenues for the latest quarter increased mostly due to upstream companies’ higher drilling activities in many of BAS’s geographic operations and the higher rig count in the US.

In comparison, 2Q17 revenue for Superior Energy Services (SPN) rose ~17% quarter-over-quarter. TechnipFMC (FTI), BAS’s larger-market-cap peer, saw a 13% quarter-over-quarter increase in revenues in 2Q17.

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Basic Energy Services’ 2Q17 earnings

The 2Q17 adjusted net earnings per share (or EPS) for Basic Energy Services is -$0.57, which fell marginally short of the consensus sell-side analyst EPS estimate of -$0.56. Despite expedited maintenance work and well completions activities, flat truck count and disrupted utilization activity due to weather and holidays led to BAS’s earnings missing analysts’ estimates.

Compared to 1Q17 when BAS’s adjusted income was -$0.87, earnings improved in 2Q17. BAS makes up 2.8% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES). Since March 31, 2017, XES has fallen 25% versus a 35% fall in BAS’s stock price during this period.

What affected BAS’s reported earnings in 2Q17?

In 2Q17, BAS’s reported net loss was $23.9 million, which was an improvement over 1Q17 when BAS reported a ~$38.6 million net loss. Quarter-over-quarter, BAS’s income improvement reflects higher margins in all of its segments except in the Contract Drilling segment. In 2Q17, BAS’s net income fell by $1 million in restructuring expenses. BAS emerged from Chapter 11 bankruptcy on December 23, 2016.

Read more on BAS in Market Realist’s Can Basic Energy Services Bounce Back after Bankruptcy? Weatherford International’s (WFT) 2Q17 earnings nearly matched analysts’ estimates in 2Q17.

Next, we’ll discuss Baker Hughes’s growth drivers in 2Q17.

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