Why Carbo Cermaics (CRR) Stock Is Down Today

NEW YORK (TheStreet) -- Carbo Cermaics (CRR) was falling 18.3% to $69.04 Monday after announcing that it expects ceramic proppant sales to fall in the third quarter.

The company said it expects ceramic proppant sales volume to fall 18% compared to the second quarter when it sold 454 million pounds of ceramic proppant. Carbo Cermaic said that ceramic proppant sales fell in the third quarter as its customers used more sand for fracking.

"We plan to manage the current competitive pricing environment, caused by proppant oversupply, by focusing on sales volumes and introducing new technologies," CEO Gary Kolstad said in a statement.

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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 several positive factors, 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 compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 41.1% when compared to the same quarter one year prior, rising from $16.31 million to $23.02 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 19.1%. Since the same quarter one year prior, revenues rose by 14.8%. 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 3.11, which clearly demonstrates the ability to cover short-term cash needs.
  • 37.13% is the gross profit margin for CARBO CERAMICS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.03% is above that of the industry average.
  • CARBO CERAMICS INC has improved earnings per share by 40.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CARBO CERAMICS INC reported lower earnings of $3.68 versus $4.59 in the prior year. This year, the market expects an improvement in earnings ($4.01 versus $3.68).
  • You can view the full analysis from the report here: CRR Ratings Report

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