U.S. Silica Holdings, Inc. (SLCA)

[eFinanceMarkets]

$SLCA U.S. Silica sinks on Q2 sand volume miss; analyst says concerns overblown

U.S. Silica (SLCA -8.5%) to 52-week lows following Q2 results that included more than double the revenues of a year ago but nevertheless missed analyst consensus revenues, as well as revised FY 2017 capex guidance of $325M-$375M vs. $125M-$150M previously.

SLCA cites rail availability issues as the source of its Q2 volume miss, as its oil and gas segment's 8% increase in Q2 sand sales of 2.7M tons of sand vs. an expected 15%-20% based on prior guidance, but SLCA says it remains on track to hit year-end 2017 delivered supply guidance as well as its target for 2018.

RBC analyst Kurt Hallead remains optimistic, saying "frac sand bearishness is at such a high level that anything said in the press release and call would've been interpreted negatively."

SLCA believes frac sand fears as overblown and that it should be able to take advantage of its balance sheet capacity to acquire smaller operators that lack the national footprint and reputation the company has developed.