Basic Energy Services Earnings: Here’s Why Investors are Ambivalent Now

Basic Energy Services, Inc. (NYSE:BAS) had a loss and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.

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Basic Energy Services, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased to $-0.21 in the quarter versus EPS of $0.47 in the year-earlier quarter.

Revenue: Decreased 17.93% to $304.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Basic Energy Services, Inc. reported adjusted EPS loss of $0.21 per share. By that measure, the company beat the mean analyst estimate of $-0.25. It missed the average revenue estimate of $309.13 million.

Quoting Management: Ken Huseman, Basic’s President and Chief Executive Officer, stated, “Demand ramped more slowly in the first quarter than we anticipated as E&P companies seemed deliberate in finalizing 2013 spending plans and cautious in initiating new projects. We did see a steady improvement in utilization late in the quarter although late winter storms hampered activity in the northern half of our operating footprint. Despite weaker than expected demand, pricing remained essentially unchanged from the year-end rate structure. Our operations group managed to hold segment margins flat sequentially as good cost control offset the 80 basis point impact from the annual reset of unemployment taxes which always hit in the first quarter.”

Key Stats (on next page)…

Revenue increased 0.77% from $302.07 million in the previous quarter. EPS increased to $-0.21 in the quarter versus EPS of $-0.27 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a loss of $0.02 to a loss $0.08. For the current year, the average estimate has moved down from a loss of $0.06 to a loss of $0.22 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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