WILLOW PARK, Texas - ProFrac Holding Corp. (NASDAQ: ACDC) reported a revenue shortfall in its fourth quarter, triggering a 3.53% decline in its stock price. The company's revenue for the quarter was $489 million, significantly below the consensus estimate of $592.54 million.
The fourth quarter results marked a challenging period for ProFrac, as acknowledged by Executive Chairman Matt Wilks, who cited persistent softness in the latter half of the year. Despite these challenges, the company managed to increase its free cash flow by 173% over the previous year, signaling a strategic shift towards enhancing efficiency and cost management.
ProFrac's Stimulation Services segment saw the activation of 10 fleets since the beginning of the fourth quarter, which, along with higher expected pumping hours, is anticipated to counterbalance pricing pressures and improve profitability levels for 2024. The Proppant Production segment is also projected to see a modest improvement in mine utilization in the first quarter of 2024, with pricing per ton expected to range between $25 and $30.
Wilks expressed confidence in the company's strategic priorities, which include providing superior services, improving utilization across the business, and achieving the lowest operating costs in the industry. He noted the early signs of positive impact from these focuses, with January and February showing record-breaking pumping efficiency levels.
Looking ahead, ProFrac expects continued growth in free cash flow and has taken steps to position itself for success in the upcoming year. The company's full-year outlook remains optimistic, with plans to activate additional fleets and improve mine utilization in the Proppant Production segment.
The stock's decline reflects investor reaction to the revenue miss, despite the company's strategic efforts and positive operational developments. ProFrac's full-year and fourth-quarter financial results were released on March 13, 2024, and the company's conference call to discuss these results was scheduled for the same day.
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