Leading supplier of resin-coated ceramic proppants CARBO Ceramics Inc. (CRR) gained focus thanks to heavy selling on Monday, pushing the stock to its 52-week low of $67.81. The stock fell more than 16% to ultimately close at $70.91 on Monday. The tumble in the market came after the company disclosed weak ceramic proppant sales during the third quarter of 2014.
On Monday, the company provided an update related to marketplace conditions and resulting impact on sales volumes. The company disclosed that its third-quarter top line was affected by customers moving toward raw sand from ceramic. This, along with increased price competition on ceramic proppant sales from both domestic and international manufacturers will greatly affect the company’s numbers in the third quarter.
Added to this, delay in well completion for a number of the company’s customers could keep its performance muted. These delays will impact some sales that the company expected to make in Sep 2014. Overall, these factors would drag down its ceramic proppant sales volume by almost 18% sequentially bringing it in line with its first quarter numbers.
The drag on CARBO Ceramics shares has been continuing since its stable second-quarter earnings release on Jul 31. Since then, the leading manufacturer of ceramic proppant on abnormally high market expectation has lost more than 50% of its market capitalization.
Debt-free CARBO Ceramics is one of the world's largest producers and suppliers of ceramic proppants for use in the hydraulic fracturing of natural gas and oil wells. The company also provides a broad range of technologies for spill prevention, containment and countermeasures, along with geotechnical monitoring. Headquartered in Houston, TX, the company manufactures products in Eufaula, Alabama; Toomsboro and McIntyre, Georgia; Luoyang, China and Kopeysk, Russia. The company has numerous storage and distribution facilities in the U.S., Canada, Europe and China.
CARBO Ceramics shares currently carry a Zacks Rank #3 (Hold). Meanwhile, one can look at better-ranked players in the oilfield service stocks like CHC Group Ltd. (HELI), Emerge Energy Services LP (EMES) and Exterran Partners, L.P. (EXLP). All these stocks carry a Zacks Rank #2 (Buy).
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