C&J Energy Services, Ltd. (NYSE:CJES) Can Witness Submissive 2016


C&J Energy Services, Ltd. (NYSE:CJES) was a notable mover during Tuesday’s trading session. The stock was lower by close to 0.74% on relative volumes, which were 0.85 times the daily average. The stock has been trending sideways over the last couple of weeks and seemed to have formed a strong support near levels of $4.92. The MACD indicator is showing first signs of a reversal indicative of the return of buying interest, which is bullish. Traders see the stock heading to $6.30 in the near term. The lack of buying interest at higher levels is a cause for concern for traders.


C&J Energy Services, Ltd. (NYSE:CJES) has come a long way after it witnessed a steep fall following the disappointing third-quarter earnings report. The company failed to meet the market consensus and report higher-than-anticipated losses.

Higher than anticipated losses

In its third-quarter, the company posted a loss of $76.5 million or $0.65 per share, missing the analysts’ estimates of $0.63 earnings loss per share. The company’s revenues came in at $427.5 million, which also missed the market consensus.

C&J Energy Services, Ltd. (NYSE:CJES)’s CEO Josh Cornstock said that the weaker earnings can be attributed to another challenging quarter resulting from continued weakness and volatility in the oil prices. Cornstock added that the diminished activity levels coupled with pricing pressure had led to weakness in its Completion Service segment. Moreover, the company’s hydraulic fracturing services were excessively impacted by two atypical events.

Struggling to revive

Cornstock explained that firstly the company had to aggressively cut its pricing for one of the customers in order to maintain the relationship. Secondly, the company adopted an alternative lubricant with the intention to lower costs, but the product didn’t meet expectations. These two events dragged the company’s results lower, as per Cornstock.

Following the wider-than-expected losses, C&J Energy Services, Ltd. (NYSE:CJES) has actively involved itself in resolving the ongoing issues. In this direction, the company has already laid out a comprehensive action plan to boost its profitability. Based on the initial results, Cornstock is confident that the company will move towards improvement in the fourth quarter. Meanwhile, the company has warned that it might continue to struggle in 2016 if the industry conditions do not revive.

It is worthy to mention that the company’s results came in sharp contrast to other industry peers, which reported positive earnings. The stock of the company surged by nearly 9% to $5.96 during the last day’s trading session.