What happened

Shares of ProPetro Holding (NYSE:PUMP) tumbled more than 30% by 1:00 p.m. EDT on Friday. Driving down the oilfield service company's stock was a delay in filing its quarterly report due to an ongoing review of its financials.

So what

ProPetro Holding announced that it has delayed filing its second-quarter Form 10-Q with the SEC. That's after the company expanded its current investigation to include "expense reimbursements and certain transactions involving related parties or potential conflicts of interest." This additional work resulted in the company reversing some of the reimbursements, as well as tightening up its internal controls. However, it has yet to identify any items that would result in it revising or restating its financial results.

An oil field at dusk.

Image source: Getty Images.

Given this ongoing review, ProPetro was only able to provide investors with a preliminary look at its second-quarter results. The company said that it recorded $529.5 million in revenue, which was down from $546.2 million in the first quarter. On a more positive note, its revenue was 15.1% higher than in the year-ago period and about $3.9 million ahead of the consensus estimate. Net income, however, was only $36.1 million, or $0.35 per share. That was not only well below the first quarter's total of $0.67 per share but missed analysts' expectations by $0.32 per share. The main culprit was a significant increase in general and administrated costs relating to the audit.

Now what

Investors tend to sell first and ask questions later when a company reveals that it's looking into some potential financial wrongdoing. While ProPetro doesn't believe it will need to revise its previously reported results, investors aren't willing to take the risk that it will uncover a major issue. Given that uncertainty, it's probably best to steer clear of this stock until the company files its full report with the SEC.

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