It has been about a month since the last earnings report for Silica Holdings (SLCA). Shares have added about 7.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Silica Holdings due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

U.S. Silica’s Q4 Earnings Beat Estimates, Sales Miss

U.S. Silica logged earnings of 37 cents per share in fourth-quarter 2023, down from 40 cents in the prior-year quarter.

Adjusted earnings in the reported quarter were 28 cents per share, down from 43 cents in the year-ago quarter. It topped the Zacks Consensus Estimate of 24 cents.

U.S. Silica recorded revenues of $336 million, down around 19% year over year. The metric missed the Zacks Consensus Estimate of $347.8 million.

Segmental Highlights

Revenues in the Oil & Gas division amounted to $200.6 million in the reported quarter, down 27% year over year. It was below our estimate of $230.1 million. Sales volume fell 19% year over year to 2.907 million tons. Oil & Gas contribution margin fell 26% year over year to $70.1 million. The figure lagged our estimate of $77.6 million.

Revenues in the Industrial & Specialty Products division were $135.5 million in the quarter, down 3% year over year. It was above our estimate of $126.3 million. Sales volume declined 8% year over year to 0.958 million tons. The segment’s contribution margin was $46.8 million in the quarter, up 17% year over year. It beat our estimate of $43.4 million.

FY23 Results

For full-year 2023, U.S. Silica recorded $1,552 million in revenues, up 2% year over year. It reported net income of $147 million or $1.87 per share for 2023.

Financials

At the end of the quarter, the company’s cash and cash equivalents were $245.7 million, down around 12.5% year over year. Long-term debt dropped nearly 21% year over year to $823.7 million.

The company generated $263.9 million in cash flow from operations during 2023.

Outlook

Per the company, the oil and gas sector is experiencing a multi-year growth phase. Favorable commodity prices and improved efficiencies in thriving completion pave the way for an active environment in the forthcoming years, with the company’s sand production capacity secured by strong contractual commitments for the current year.

U.S. Silica maintains its key emphasis on generating operational cash flow and declining leverage on the balance sheet. The company foresees significant operating cash flow in 2024, allocating around $60 million in capital expenditures for the year.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -37.88% due to these changes.

VGM Scores

Currently, Silica Holdings has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Silica Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Silica Holdings is part of the Zacks Mining - Miscellaneous industry. Over the past month, Newmont Corporation (NEM), a stock from the same industry, has gained 18%. The company reported its results for the quarter ended December 2023 more than a month ago.

Newmont reported revenues of $3.96 billion in the last reported quarter, representing a year-over-year change of +23.7%. EPS of $0.50 for the same period compares with $0.44 a year ago.

For the current quarter, Newmont is expected to post earnings of $0.39 per share, indicating a change of -2.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -17.2% over the last 30 days.

Newmont has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.

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