 |
 |
||||||
[August 2009]
CARBO Ceramics Announces Second Quarter 2009 Earnings
CARBO Ceramics Inc (Houston, TX, USA) has reported net income of US$9.4 million, or US$0.41 per diluted share, on revenues of US$69.3 million for the quarter ended 30 June 2009. The company previously reported that it had sold its fracture and reservoir diagnostics business. Because of the transaction, which closed on 10 October 2008, the 2008 operating results of this business have been accounted for as discontinued operations. Continuing operations include the company's ceramic proppant, software, consulting services and geotechnical monitoring businesses.President and CEO Gary Kolstad commented: "The economic challenges faced by the oil and gas industry over the last several months have resulted in significant reductions in drilling and completion activities. Given this trend, we are pleased with our second quarter operating results. While our sales volumes and associated revenues were lower than those experienced last quarter and during the same period last year, the percentage declines in either case are better than the declines experienced in the worldwide and North American rig counts.
“In the second quarter, we continued to see strong demand for our newest product CARBOHYDROPROP in the large resource plays, and more operator acceptance of the benefits of Economic Conductivity™. We believe these events are particularly significant given the operating environment we faced during the quarter, and are a testament to the value that E&P companies can derive from CARBO's products."
Revenues for the second quarter of 2009 decreased 22% compared to the second quarter of 2008 and decreased 24% compared to the first quarter of 2009. Worldwide proppant sales volume totalled 216 million pounds for the second quarter of 2009, representing a year-over-year decrease of 23% and a sequential decrease of 14%. Quarterly proppant sales volume in the US decreased 17% year-over-year, but actually grew by 1% sequentially, in spite of drilling rig count decreases of approximately 50% and 30%, respectively.
Operating profit for the second quarter of 2009 decreased US$3.2 million compared to the second quarter of 2008, while operating margins increased slightly, as a lower sales volume was partially offset by reduced freight and other operational costs and a favourable product mix. Selling, general and administrative expenses were virtually flat year-over-year and lower sequentially, as savings were realised from cost reduction initiatives.
Income from continuing operations for the second quarter of 2009 decreased US$2.4 million compared to the second quarter of 2008.
Gary Kolstad commented on the outlook for the company stating: "Although the decline rate of the North American rig count has recently slowed, it is still unclear as to when the market will bottom. At some point, the self-correcting nature of the oil and gas industry should react positively to the reduced natural gas drilling activity; however it is possible that a notable recovery is not experienced until sometime in 2010. Nevertheless, we will continue to focus our efforts on expanding our client base in the large resource plays where our business keeps building as a result of the growing acceptance for our products.
“With respect to our financial situation, our balance sheet and overall financial condition remain strong. In fact, we recently announced an increase to our quarterly dividend demonstrating continued confidence in CARBO's outlook and financial strength."
www.carboceramics.com
ENDS