What happened
Shares of NexTier Oilfield Solutions (NEX) jumped by about 10% at 11:15 a.m. ET on Thursday. Fueling the oil stock was its fourth-quarter report.
So what
NexTier Oilfield Solutions reported robust fourth-quarter results. While revenue was down 3% from the third quarter to $870.9 million due to seasonality, it was up more than 70% year over year. Meanwhile, adjusted net income grew to $145.8 million, or $0.59 per share, compared to $129.5 million, or $0.52 per share, in the third quarter. The oilfield services company also generated $93.2 million of free cash flow.
"Operationally, NexTier delivered another very strong quarter with improved profitability and returns, even in a counter-seasonal period," said CEO Robert Drummond in the earnings press release. That's enabling the company to generate strong free cash flow.
NexTier has started returning its free cash flow to shareholders by repurchasing its stock. It bought back 11.5 million shares in the fourth quarter for $113 million and has continued buying back shares this year. Since starting its program in October, it has repurchased 5.8% of its outstanding shares.
Now what
CFO Kenny Pucheu noted in the earnings press release: "Fundamentals in the oilfield services sector have improved significantly over the past couple of years, and our intense focus on timely investments and capital discipline has allowed us to generate industry leading returns. We see additional upside in 2023." That makes the company optimistic it can continue producing strong and growing cash flow, half of which it intends to return to investors by repurchasing its shares. Those buybacks could give the stock the fuel to continue rallying in the coming quarters.
