If you read an earnings report or listened to conference call this quarter, you might have heard a recurring theme. Or at least I did, as almost every company I followed this earnings season blamed Mother Nature for missing analyst estimates. What was interesting is that this time it wasn’t the retailers that were using the weather as an excuse. Instead, companies engaged in oil and gas production were the ones complaining about the weather.
On Heckmann Corporation (NYSE:HEK)‘s recent conference all, the frack-water treatment specialist made mention of the weather nearly two dozen times. The executive chairman led off the call by saying, “As you can see by our release, we had a very strong quarter in the face of fairly tough weather.” The company missed analyst estimates on both the top and bottom lines, and “without question weather was the biggest factor for the first quarter,” according to CEO Mark Johnsrud.
In fact, weather was so bad in its operating areas that Johnsrud went on to say: “Unusually harsh conditions in the Bakken affected approximately 13 days of work or almost 15% of the quarter. Additional to that is we lost approximately five days of work in the Marcellus due to inclement weather.” When you put into context that those areas represent two of the company’s largest operating basins, the fact that it missed revenue expectations by 4.4% isn’t that big of a deal.
Heckmann Corporation (NYSE:HEK), as I said, wasn’t the only company that had a problem with the weather last quarter. Oil and gas producer Linn Energy LLC (NASDAQ:LINE) had a number of issues in the quarter, with the weather negatively affecting its production volumes during the quarter. The company specifically pointed to severe winter weather in February and March that hit its operations in Oklahoma and Texas that caused the company significant production and drilling delays.
Linn Energy LLC (NASDAQ:LINE)’s experience in the quarter was similar to that experienced by SandRidge Energy Inc. (NYSE:SD); however, its weather-related impact wasn’t as great. CEO Tom Ward noted that the company’s “operations team continues to perform very well, as we curtailed only 100,000 Boe from the two major storms that hit Oklahoma and Kansas during the first quarter where we had one time over 400 wells offline.” What’s different here is that SandRidge Energy Inc. (NYSE:SD) exceeded estimates, which is why it was able to trumpet the fact that it was able to take whatever Mother Nature threw its way in the quarter.