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Analyzing Flotek Industries’ 4Q17 Performance by Segment

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Feb. 26 2018, Published 3:12 p.m. ET

Flotek Industries’ 4Q17 segment performance 

Flotek Industries (FTK) is 0.04% of the iShares Core S&P Small-Cap ETF (IJR). IJR increased 8% in the past year, versus a 56% decrease in FTK’s stock price during the period. FTK’s Consumer and Industrial Technologies segment witnessed strong revenue growth (~11% up) among its segments in 4Q17 over 4Q16.

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Why FTK’s operating income improved in 4Q17

By adjusted EBITDA, both FTK’s operating segments recorded income. FTK’s Consumer and Industrial Technologies segment adjusted EBITDA increased 33% in 4Q17 over 4Q16. The Energy Chemistry Technologies segment saw 15.5% operating profit growth in 4Q17 compared to a year ago. EBITDA (or earnings before interest, tax, depreciation, and amortization) measures a company’s operating earnings.

Factors helping 4Q17 results

  • higher sales of margin products
  • cost control implementations
  • reduced pressure on citrus price inflation, following Hurricane Irma in 3Q17 (FTK uses citrus as an input)
  • the divestiture of the Drilling Technologies and Production Technologies segment improved cash flows

Earnings drivers: Negatives

  • the adverse effect of weather
  • upstream customers’ budget exhaustion

Next in this series, we’ll discuss SPN’s growth drivers and operating income.

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