Forbes Energy's Dismal 4Q - Analyst Blog
April 02 2013 - 3:50AM
Zacks
Forbes Energy Services
Ltd. (FES), an oilfield services contractor, reported
disappointing results for the fourth quarter of 2012, with loss per
share of 22 cents, much wider than the Zacks Consensus Estimate of
a loss of 17 cents. Increased pricing pressures coupled with
reducing demand negatively impacted earnings
Revenue: In the
fourth quarter of 2012, total sales for Forbes Energy were $107.0
million, down 14.1% year over year, primarily due to shorter
daylight hours and holidays. Revenue also missed the Zacks
Consensus Estimate of $110.0 million by 2.7%.
Segment Details:
In the reported quarter, revenue from the Well
Servicing segment was recorded at $48.6 million, a
decrease of 4.9% compared with the year-ago quarter. Fewer 24-hour
rigs working led to the decline.
Revenue from Fluid
Logistics and Other segment came in at $58.5 million,
facing a decline of 20.5% year-over-year, due to a reduction in the
truck hours.
Margins: Operating
profit in the reported quarter dropped by a whopping 98.1% to $0.3
million from the $18.1 million reported in the year-ago quarter.
This decrease was attributable to a higher insurance expense as
well as higher wages and fuel charges. Operating margin in the
quarter was recorded at 0.3% compared with 14.5% in the fourth
quarter of 2011.
Balance Sheet/Cash
Flow: Exiting the fourth quarter 2012, Forbes Energy’s
cash and cash equivalents were approximately $17.6 million,
compared with $5.3 million in the previous quarter. Total debt
balance stood at $306.3 million against $296.1 million in the
preceding quarter.
Capital expenditure in the quarter
amounted to $8.7 million.
Outlook: Forbes
Energy expects capital expenditure in 2013 to be roughly
$20.0–$23.0 million. The company also predicts a stable pricing
environment in 2013.
Forbes Energy currently carries a
Zacks Rank #3 (Hold). Other stocks worth a look in the oil &
gas equipment & services sector are NSK Ltd.
(NPSKY); carrying a Zacks Rank #1 (Strong Buy); and
Kaydon Corporation (KDN) and Worthington
Industries Inc. (WOR) carrying a Zacks Rank #2 (Buy).
FORBES ENERGY (FES): Free Stock Analysis Report
KAYDON CORP (KDN): Free Stock Analysis Report
NSK LTD -UN ADR (NPSKY): Get Free Report
WORTHINGTON IND (WOR): Free Stock Analysis Report
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