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Sep 30, 2024
Liberty Energy Q3 2024 Earnings Report
Liberty Energy reported solid results driven by efficiency gains amidst a slowing demand environment.
Key Takeaways
Liberty Energy reported Q3 2024 revenue of $1.1 billion and net income of $74 million, or $0.44 per share. The company delivered a 22% TTM Adjusted Pre-Tax Return on Capital Employed and distributed $51 million to shareholders through share repurchases and cash dividends. They are planning to temporarily and modestly reduce our deployed fleet count while continuing to support long-term partners.
Revenue of $1.1 billion, a 2% sequential decrease
Net income of $74 million, or $0.44 fully diluted earnings per share
Adjusted EBITDA of $248 million
Distributed $51 million to shareholders through share repurchases and cash dividends
Liberty Energy
Liberty Energy
Forward Guidance
The company expects a low double-digit percentage reduction in Q4 activity, with completions activity likely increasing in early 2025. They anticipate healthy free cash flow generation in 2025 and plan to shift strategic investment towards growing opportunities for power generation services.
Positive Outlook
- Global demand for oil will grow by approximately one million barrels of oil per day this year and is expected to exceed this next year.
- The commissioning of LNG export facilities in the U.S. and Canada is expected to stimulate gas activity in 2025 and support higher sustained natural gas demand.
- Frac industry dynamics are poised to improve in 2025 from today’s levels.
- Large, well-capitalized E&Ps are enjoying attractive economics across a wide range of oil prices.
- The company expects to deliver healthy free cash flow generation in 2025.
Challenges Ahead
- Oil markets reflect significant uncertainty across the global economy, OPEC+ production plans, Chinese economic growth and Middle East geopolitical dynamics.
- While global oil production may be in surplus in 2025, oil prices are expected to remain relatively rangebound and supportive of North American activity.
- Natural gas prices rose in recent weeks after storage congestion concerns eased due to producer curtailments and strong domestic power generation demand, but higher prices may incentivize reversal of curtailments and prove to be transitory.
- Elevated uncertainty in energy markets has further left operators reluctant to accelerate completions activity in advance of the new year.
- Soft year end frac activity levels are pressuring prices in the near term to levels that are inconsistent with the anticipated market demand and supply of horsepower in 2025.