Why Is Liberty Oilfield Services (LBRT) Down 5.3% Since Last Earnings Report?

Core Viewpoint - Liberty Oilfield Services reported disappointing Q3 2024 earnings, missing both net income and revenue estimates, primarily due to poor execution and increased costs, leading to a decline in share performance [2][3][18] Financial Performance - Adjusted net income for Q3 2024 was 45 cents per share, missing the Zacks Consensus Estimate of 55 cents, and down from 86 cents in the prior year [2] - Revenues totaled $1.14 billion, missing estimates by 0.2% and down 6.6% from $1.22 billion in the previous year [3] - Adjusted EBITDA was $247.8 million, below the projection of $255.9 million and down from $319.2 million year-over-year [3] Shareholder Returns - The board announced a dividend of 8 cents per share, a 14% increase from the previous 7 cents, payable on December 20 [4] - In the quarter, Liberty returned $51 million to shareholders through share repurchases and dividends [4] - The company repurchased 1,939,072 shares at an average price of $20.27, totaling approximately $39 million, and has $323 million remaining for future buybacks [5] Operational Developments - Liberty's fleet technology transition is on track, with plans for 90% of fleets powered by natural gas by 2025 [6] - The company achieved a record for pumping efficiency and completed the highest number of monthly pumping hours in its history [6] Cost and Capital Expenditure - Total costs and expenses were $1.031 billion, a 2% increase from the previous year and higher than projections [7] - Capital expenditures for the quarter were $162.8 million, exceeding projections of $136.6 million [8] Market Outlook - Global oil demand is projected to grow by approximately one million barrels per day this year, with stable oil prices expected to support North American activity [11] - The company anticipates a slowdown in the frac market due to adjustments in E&P operators' development programs, expecting a low double-digit percentage reduction in fourth-quarter activity [13][14] - Liberty expects a rebound in completions activity in early 2025 as operators aim to maintain production levels [14] Strategic Focus - The company plans to maintain a disciplined investment approach, focusing on power generation services and expects healthy free cash flow generation in 2025 [15] - Liberty's aggregate VGM Score is A, indicating strong growth potential despite recent downward trends in estimates [17]