Why TETRA Technologies Stock Rallied as Much as 15% Today

What happened

Shares of energy-services provider TETRA Technologies (NYSE:TTI) rose as much as 15% in morning trading on May 4. At roughly noon EDT, they were still clinging to a 12% gain. The story here was earnings-driven, but it really wasn’t a simple quarter. 

So what

TETRA Technologies had revenue of $77 million in the first quarter of 2021, up about 2% sequentially from the fourth quarter of 2020. It was, however, lower by around 42% compared to the same quarter last year.

On the bottom line, the company reported an adjusted loss of $0.04 per share, $0.01 worse than the final quarter of 2020 and $0.08 lower than the same period the previous year. None of this is particularly good news, though the energy-services provider generated positive free cash flow. 

Image source: Getty Images.

There were a host of complexities to deal with in the quarter. For example, the company noted the successful deconsolidation of CSI Compressco in its earnings release and the impact of the winter storm that effectively shut most of Texas in February. That said, there were also much less complicated things to like, including a notable reduction in debt and a partnership on the carbon-capture front.

That said, it was most likely a forward-looking comment from CEO Brady Murphy that got investors excited today: “As we enter the second quarter, we see stronger activity levels that are well above our March run rate. We are optimistic for delivering a very solid second quarter that will be representative of what we can achieve in the current market environment.” 

Now what

Wall Street tends to be forward looking, and as the complexity of the first quarter fades into the past, it looks like the future for TETRA Industries could materially improve. While first-quarter results were complicated and, perhaps, not great reading, long-term investors appear to be paying more attention to management’s outlook for the future.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.