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.
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.