Solaris Oilfield Infrastructure Inc (SOI) Reports Q1 2024 Earnings

GuruFocus Research

25 April 2024 at 6:04 pm·3-min read

Revenue: Reported at $68 million for Q1 2024, up 7% from Q4 2023 and down 18% from Q1 2023, exceeding the estimated $62.45 million.
Net Income: Achieved $7 million in Q1 2024, consistent with Q4 2023 but down from $12 million in Q1 2023, surpassing the estimated $6.10 million.
Earnings Per Share (EPS): Recorded at $0.14 per diluted Class A share in Q1 2024, meeting the estimated EPS of $0.14.
Free Cash Flow: Positive $14 million in Q1 2024 after accounting for seasonal working capital use, indicating strong cash generation.
Capital Expenditures: Significantly reduced to approximately $3 million in Q1 2024, a 55% decrease from Q4 2023, aligning with a strategic reduction in spending.
Shareholder Returns: Continued commitment with approximately $178 million returned through dividends and share repurchases, alongside a dividend increase of 20% since 2018.
Operational Efficiency: Maintained revenue on 102 fully utilized systems, showing stable operational capacity despite market fluctuations.

Warning! GuruFocus has detected 4 Warning Sign with SOI.

Solaris Oilfield Infrastructure Inc (NYSE:SOI) disclosed its first quarter 2024 financial results on April 25, 2024, revealing earnings that aligned with analyst expectations for EPS and exceeded revenue forecasts. The detailed financial outcomes were presented in their 8-K filing. Solaris, a key player in the oilfield services sector, provides innovative solutions aimed at enhancing efficiency and safety in North American shale plays.

Company Overview

Solaris Oilfield Infrastructure Inc offers critical oilfield products and services, including Mobile Proppant Management Systems and Automated Control Systems, which are essential for drilling and completion operations. The company's offerings are designed to support exploration and production (E&P) companies and oilfield service providers by improving operational efficiencies and reducing costs.

Financial Performance

For Q1 2024, Solaris reported net income of $7 million, or $0.14 per diluted Class A share, consistent with the previous quarter and aligning with analyst estimates of $0.14 EPS. However, this marks a decrease from the $0.23 per share reported in the same quarter the previous year. The company's revenue for the quarter stood at $68 million, a 7% increase from Q4 2023 and notably higher than the estimated $62.45 million, demonstrating robust growth in their lower-margin ancillary last mile logistics services and improved system pricing.

Operational Highlights

During the quarter, Solaris maintained operations of 102 fully utilized systems, including sand and top fill systems, reflecting stable operational capacity compared to Q4 2023. The company tracked an average of 64 industry frac crews, indicating consistent demand for their specialized services.

Shareholder Returns and Financial Strategy

Solaris continues to prioritize shareholder returns, having distributed approximately $5 million in dividends and repurchased 1.1 million shares for about $8 million during the quarter. The company's approach to financial management emphasizes strong free cash flow generation, which stood at $14 million after accounting for asset disposals and seasonal working capital use.

Future Outlook

Looking ahead, Solaris expects to sustain its shareholder return strategy supported by robust free cash flow projections for the remaining year. The company plans to maintain a healthy balance sheet, which will facilitate future organic and inorganic investments, aiming for a full-year capital expenditure of less than $15 million, significantly down from the previous year.

Conclusion

Solaris Oilfield Infrastructure Inc's first quarter results for 2024 reflect a resilient operational and financial posture, aligning with EPS estimates and surpassing revenue expectations. The company's strategic focus on enhancing shareholder value, coupled with a strong commitment to operational excellence and financial prudence, positions it well for sustained growth in the competitive oilfield services market.

For more detailed information and discussion on Solaris Oilfield Infrastructure Inc's Q1 2024 earnings, stakeholders and interested parties are encouraged to view the full 8-K filing.

Explore the complete 8-K earnings release (here) from Solaris Oilfield Infrastructure Inc for further details.

This article first appeared on GuruFocus.

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Solaris Oilfield Infrastructure Inc (SOI) Reports Q1 2024 Earnings

Company Overview

Financial Performance

Operational Highlights

Shareholder Returns and Financial Strategy

Future Outlook

Conclusion

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