Why Carbo Ceramics (CRR) Is Up Today

NEW YORK (TheStreet) -- Carbo Ceramics  (CRR) shares were rising 14.99% to $121.29 on Thursday afternoon after the company announced fourth-quarter earnings results that beat expectations.

Carbo announced fourth-quarter earnings per share of 90 cents, which surpassed the consensus estimate of 81 cents. Revenues increased 7.1% year-over-year to $164.5 million, which beat analysts' expectations of $162.24 million. The company also set a record for ceramic proppant values in 2013, with 1.7 billion pounds, according to the company's statement.

"We finished the year on a strong note," said CEO Gary Kolstad in the statement. "Activity rebounded in December after heavy rains and icy weather hampered sales volumes in both the Eagle Ford and the Permian during the early part of the fourth quarter.  Although the marketplace remains competitive, our proppant pricing was stable when compared to the third quarter of 2013. 

TheStreet Ratings team rates CARBO CERAMICS INC as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CARBO CERAMICS INC (CRR) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 9.3%. Since the same quarter one year prior, revenues rose by 33.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CRR has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.49, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Energy Equipment & Services industry average. The net income increased by 26.1% when compared to the same quarter one year prior, rising from $23.90 million to $30.15 million.
  • Powered by its strong earnings growth of 25.96% and other important driving factors, this stock has surged by 38.47% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • 36.98% is the gross profit margin for CARBO CERAMICS INC which we consider to be strong. Regardless of CRR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CRR's net profit margin of 14.96% compares favorably to the industry average.
  • You can view the full analysis from the report here: CRR Ratings Report