CARBO Achieves 111% Revenue Increase in 2017 Second Quarter
CARBO’s revenues for the second quarter of 2017 increased 111%, or $22.9 million, compared to the same period of 2016.
CARBO® Ceramics Inc. recently reported financial results for the second quarter of 2017. The company reported revenues of $43.6 million and an operating loss of $23.7 million for the quarter ended June 30, 2017, compared to revenue of $20.7 million and an operating loss of $30.0 million in the same period of 2016. The operating loss includes $11.1 million of costs primarily associated with slowing and idling production, two-thirds of which is non-cash.
Revenues for the second quarter of 2017 increased 111%, or $22.9 million, compared to the same period of 2016. The increase was primarily attributable to increases in technology product sales, frac sand sales, and environmental product sales.
“We continue to execute on our strategy to drive both revenue growth and profitability improvement,” said Gary Kolstad, CEO. “The second quarter resulted in a 26% sequential revenue increase and strong sequential incremental operating margins. We anticipate technology products, industrial ceramic products and mineral processing opportunities to lead our revenue growth and return to profitability, and now believe our revenue growth in 2017 will be at least a 60% increase over 2016. Although the commodity price environment remains tenuous in the oil and gas industry, we are optimistic about our oilfield business for the second half of 2017.
“Technology product sales are tracking as expected, and existing second half of 2017 opportunities are strong compared to the first half of 2017. KRYPTOSPHERE HD continues to see success in deep wells, specifically the Lower Tertiary Gulf of Mexico, where all super majors have now selected the product for use. Currently, there are several wells slated for completion with KRYPTOSPHERE HD in the second half of 2017. Additional technologies, such as SCALEGUARD, continue to grow as well.
“We expect the base ceramic business to see higher volumes in the second half as compared to the first half of 2017. We are focused on improving the pricing. We have had modest price increases in base ceramic over the last couple of quarters, and we expect this trend to continue as the industry should move from an inventory liquidation mode into a mode of increased pricing to produce profit on manufactured proppant. We believe the negative returns throughout the base ceramic industry should lead to increased industry pricing moving forward, given the basic logic that companies want to provide a positive economic return on business.
“The frac sand business has grown substantially this year and is part of delivering a complete suite of product offerings to our oil and gas clients. Given the strong demand for frac sand, we ramped to full utilization at our Marshfield, Wis., sand plant during the second quarter of 2017. We anticipate similar levels of sand sales in the third quarter of 2017 as compared to the second quarter of 2017. In addition to increased sand volumes, we are also benefiting from rail car revenue generated from leased rail cars dedicated to this business.
“We believe the work completed in the second quarter of 2017, to solidify our industrial product offering and increase our sales channels, will allow us to continue to grow industrial products and services in the second half of 2017. Our current product suite, including new products we are introducing in the industrial arena, should allow us to grow this business over the long term.”
For more information, visit www.carboceramics.com.