Fields of Promise? KLX Energy (KLXE) Leads PRISM Oil and Gas Index Today, Here’s Why

Today the PRISM Oil and Gas Index company KLX Energy (KLXE) provided preliminary Q2 financial results that showed promise to investors as the stock traded up ~11% on the day. The company’s prior quarter steeply disappointed estimates on almost all earnings metrics as Q1 EPS missed estimates by $0.63 and revenues missed by ~$7M.

The company’s Q2 revenue guidance came in at $178M – $182M vs prior guidance of $180M – $200M with FactSet estimates cited at $185.9M additionally, adjusted EBITDA margin was raised to 14-15% from prior of 9-11%. The company also expects Q3 2024 revenue to be flat to slightly up relative to Q2 with similar margins to the prior quarter.

Chris Baker, KLX President and Chief Executive Officer, stated, “We are extremely proud of our second quarter performance. Despite a 7% rig count decline this quarter, and continued drilling and completions activity volatility, KLX revenue results are expected to increase approximately 3% sequentially and Adjusted EBITDA Margin results are materially above our previously provided guidance. We expect to generate second quarter Adjusted EBITDA and Adjusted EBITDA Margin of $24 million to $27 million and 14% and 15% respectively.”