U.S. Silica Holdings, Inc. SLCA reported a net loss of $32.4 million or 44 cents per share in second-quarter 2020 as against a net income of $6.2 million or 8 cents per share in the year-ago quarter.
Barring one-time items, adjusted loss per share was 9 cents, which was narrower than the Zacks Consensus Estimate of a loss of 55 cents.
U.S. Silica generated revenues of $172.5 million, down 56% year over year. However, the figure surpassed the Zacks Consensus Estimate of $144.9 million.
U.S. Silica Holdings, Inc. Price, Consensus and EPS Surprise
Segment Highlights
Revenues in the Oil & Gas division amounted to $72.5 million, down 73% year over year. Overall sales volume fell 72% year over year to 1.112 million tons. Oil & Gas contribution margin declined 20% sequentially and 63% year over year to $26.2 million or $23.53 per ton.
Revenues in the Industrial and Specialty Products division amounted to $100 million in the quarter, down 18% year over year. Overall sales volume fell 19% year over year to 0.792 million tons. The segment’s contribution margin was $35.1 million or $44.34 per ton in the quarter, down 19% sequentially and down 30% year over year.
Financials
At the end of the second quarter, the company’s cash and cash equivalents were $158.7 million, down 16.2% year over year. Long-term debt was $1,210.5 million, down 1.6% year over year.
Outlook
In the Oil & Gas segment, U.S. Silica predicts a mid-single-digit percentage rise in third-quarter proppant volumes and a meaningful increase in SandBox loads. Moreover, the company expects contribution margin from the unit to be down sequentially.
In the Industrial & Specialty Products segment, it sees a recovery in third-quarter whole grain and higher-margin ground silica volumes. Further, the company expects sustained strength in its diatomaceous earth and specialty clay business. As a result, it expects the contribution margin from the segment to be up 5-10% sequentially in the third quarter. Further, the company stated that it expects volumes and profitability for the fourth quarter to be similar to the levels of the third quarter.
Price Performance
Shares of U.S. Silica have plunged 68.4% in the past year against the industry’s 18.4% growth.
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Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Equinox Gold Corp. EQX, Barrick Gold Corporation GOLD andGold Fields Limited GFI.
Equinox Gold has a projected earnings growth rate of 255.2% for the current year. The stock has gained around 103% in a year. It currently has a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Barrick Gold has a projected earnings growth rate of 72.6% for the current year. The company’s shares have gained around 63% in a year. It currently has a Zacks Rank #2.
Gold Fields has an expected earnings growth rate of 35.7% for 2020. The company’s shares have rallied 121.4% in the past year.It is presently a Zacks #2 Ranked player.
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