Basic Energy Services Earnings Preview

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Investors never know what to expect for Basic Energy Services (NYS: BAS) , as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings Thursday. Basic Energy Services provides a range of well-site services to oil and gas drilling and producing companies, including well servicing, fluid and well site construction services, completion and remedial services, and contract drilling.

What analysts say:

  • Buy, sell, or hold?: The majority of analysts back Basic Energy Services as a buy. But with 66.7% of analysts rating it a buy, Basic Energy Services is still below the mean analyst rating of its nearest 10 competitors, which average 76% buys. Analysts don't like Basic Energy Services as much as competitor TETRA Technologies overall. Five out of seven analysts rate TETRA Technologies a buy compared with 10 of 15 for Basic Energy Services. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared with three months ago.
  • Revenue Forecasts: On average, analysts predict $349.1 million in revenue this quarter. That would represent a rise of 77% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.65 per share. Estimates range from $0.48 to $0.76.

What our community says:
CAPS All-Stars are solidly behind the stock with 93.4% awarding it an "outperform" rating. The community at large agrees with the All-Stars with 92.8% granting it a rating of "outperform." Fools are gung-ho about Basic Energy Services and haven't been shy with their opinions lately, logging 116 posts in the past 30 days. Despite the majority sentiment in favor of Basic Energy Services, the stock has a middling CAPS rating of three out of five stars.

Management:
The company boosted its gross margin by seven percentage points in the last quarter. Revenue rose 69.5% while cost of sales rose 52.5% to $185.3 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

37.6%

36.6%

33.7%

29.9%

Operating Margin

14.0%

11.1%

3.8%

(1.3%)

Net Margin

5.6%

(7.5%)

(0.9%)

(4.7%)

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At the time this article was published

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