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Jun 30, 2020
Liberty Energy Q2 2020 Earnings Report
Liberty Energy's financial performance declined due to reduced completion activity, but the company took steps to conserve cash and maintain liquidity.
Key Takeaways
Liberty Energy reported a significant decrease in revenue and a net loss for Q2 2020 due to the downturn in completion activity. However, the company generated free cash flow and maintained a strong liquidity position.
Cash and cash equivalents increased by $68 million to $125 million.
Total liquidity was $207 million at the end of the second quarter.
Revenue decreased to $88 million, with a net loss of $66 million, or $0.55 loss per share.
The company reduced general and administrative expenses and capital expenditures to align with reduced activity.
Forward Guidance
Liberty Energy anticipates a modest acceleration in activity during the third quarter and expects to have 10 to 12 frac fleets working in the fourth quarter of 2020.
Positive Outlook
- Expects modest acceleration in activity during the third quarter.
- Anticipates 10 to 12 frac fleets working in the fourth quarter of 2020.
- Believes it is significantly advantaged with a strong balance sheet.
- Offers high-quality service.
- Has low capital outlay and flexible cost structure.
Challenges Ahead
- Collapse of worldwide demand for oil during the second quarter resulted in an abrupt reset of operators’ drilling and completion activity plans for the year.
- Second quarter likely marks the bottom in completions activity.
- Customer dialogues center around optimizing their development plans for the second half of 2020 and looking into 2021.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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