Why Hi-Crush Partners LP Is Surging 10% Higher Today

By Markets Fool.com

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

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What: Hi-Crush Partners' -- a producer, transporter, and distributor of sand used in fracking -- unit price is surging 10% higher Tuesday after announcing its fourth-quarter results along with shares of other oil companies thanks to the price of oil climbing 7% higher today.

HCLP Chart
HCLP data by YCharts

So what: Despite a relatively strong quarter, Hi-Crush Partners reported fourth-quarter earnings per unit of $0.85, which was $0.05 worse than the consensus estimate. Though, Hi-Crush Partners crushed revenue estimates of $108.9 million with its $130.9 million in the fourth quarter -- an impressive year-over-year gain of 104%.

Co-CEO of Hi-Crush Partners James M. Whipkey was sure to note the positive results in the earnings press release,

2014 was an exceptional year for Hi-Crush... We nearly doubled our produced volumes. We further reduced our already low production cost per ton, and we increased our distributable cash flow by over 60%. All of these factors allowed Hi-Crush to increase its distribution by more than 32% during the year, placing us near the top of the entire MLP universe in this parameter.

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Now what: Furthermore, the company noted that 88% of its 2015 production is committed under long term take-or-pay contracts. That should relieve some investors as market volatility and oil-price swings will continue in 2015. It seems Hi-Crush Partners' has a bright future, at least in the short-term, with a distribution coverage ratio of 1.31 times, but investors who are looking to buy units should note that if oil prices trend lower, the company's shares are sure to follow.

The article Why Hi-Crush Partners LP Is Surging 10% Higher Today originally appeared on Fool.com.

Daniel Miller has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.