Canada's Source Energy Q1 revenue falls on lower activity

Source Energy Services

07/05/2026 23:26

Overview

Canada frac sand producer's Q1 2026 revenue fell 23% yr/yr amid lower customer activity

Adjusted EBITDA for Q1 2026 was slightly above two analyst estimates

Company renewed share buyback program, repurchased 2,500 shares during quarter

Outlook

Company expects 2026 Canadian customer activity levels to be broadly consistent with 2025

Most customers anticipated to keep flexible capital budgets amid geopolitical and commodity price uncertainty

Company sees medium- to long-term demand growth from Western Canadian LNG projects and natural gas exports

Result Drivers

LOWER CUSTOMER ACTIVITY - Co said revenue and gross margin declined mainly due to customers planning for more balanced activity levels amid economic uncertainty and lower commodity prices

SHIFT IN SALES MIX - Co said average realized sand price fell due to a higher proportion of lower-priced, finer-mesh and domestic sand sales

COST REDUCTIONS - Co said cost of sales and operating expenses fell due to lower production costs, reduced third-party sand purchases, and lower incentive compensation

Company press release: ID:nACS8d45ha

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q1 EPS
-C$0.25
Q1 Net Income
-C$3.30 mln
Q1 Adjusted EBITDA
C$26.32 mln
C$24.90 mln (2 Analysts)

Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

The average consensus recommendation for the construction materials peer group is "buy"

Wall Street's median 12-month price target for Source Energy Services Ltd is C$18.25, about 8% above its May 6 closing price of C$16.90

The stock recently traded at 5 times the next 12-month earnings vs. a P/E of 5 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)