What happened

Shares of NexTier Oilfield Solutions (NEX), an energy services company operating largely in the U.S. market, rose a dramatic 20% in the first few minutes of trading on Jan. 4. Roughly a half hour into the day the stock was still up 19%. The big story driving this advance was a news release that hit the market after the close on Jan. 3.

So what

After the market closed yesterday NexTier Oilfield Solutions provided Wall Street with an update on its fourth-quarter performance. Investors clearly liked what they saw. Notably, the company is expecting revenue in the fourth quarter of 2021 to come in between $500 million and $510 million. That's a 25% increase over the third-quarter figure, largely driven by an acquisition. Reported earnings before interest, taxes, depreciation, and amortization (EBITDA) is expected to be between $75 million and $80 million in the quarter (including an $18 million asset sale), up from $27.8 million in the third quarter. It's not surprising that investors were pleased with this update.

Oil rigs with the sun setting in the background.

Image source: Getty Images.

That said, the company said it believes it has made a "step change" in its profitability and expects "further gains" throughout 2022. This isn't a one-time commentary; NexTier Oilfield Solutions is painting a bright future. It also helps that it hit its projection for having 31 well fleets in action by the end of the fourth quarter. That suggests another uptick, though perhaps a more modest one, could be on tap in the first quarter, noting that it has an additional fleet staffed and ready to be deployed in the first quarter of 2022.

Now what

It looks like NexTier Oilfield Solutions is making good progress on its growth plans. While that will likely lead to a very solid fourth quarter, the upbeat news release suggests that even more good news could be in store as 2022 unfolds. Energy services is a tough, cyclical business, so investors need to be cautious when they invest in the space. That said, it looks like NextTier Oilfield Solutions is hitting on all cylinders right now.