Investing.com -- On Thursday, RBC (TSX: RY ) Capital Markets analyst Keith Mackey reiterated a Sector Perform rating for Calfrac Well Services Ltd . (TSX: CFW ) with a price target of CAD$5.00, despite expressing a negative sentiment following the company’s fourth-quarter results. Calfrac’s adjusted EBITDA for the quarter was $35 million, falling short of both street and RBC’s expectations by 15% and 19%, respectively, due to weaker performance in North America.

The company’s fourth-quarter revenue of $381 million aligned with predictions, but the EBITDA deficit was marked by a $5 million and $8 million miss compared to street and RBC estimates. North America’s EBITDA contribution stood at $23 million, falling short of RBC’s $28 million forecast, while the Argentina division’s $16 million EBITDA was slightly below the $17 million anticipated. The earnings per share (EPS) also underperformed, with a reported loss of $0.07 compared to the expected loss range of $0.02 to $0.03.

Calfrac anticipates modest year-over-year improvements in its Canadian operations for fracturing and coiled tubing services in FY25. However, the company noted potential impacts from tariffs on imports from the US to Canada. In the US, Calfrac reduced its operating footprint in the first quarter of 2025 to six fleets due to a seasonal slowdown, but expects demand and utilization to improve as the company resumed operations in the Appalachian Basin in January, buoyed by a more favorable natural gas price outlook.

In Argentina, Calfrac predicts a strong first quarter for 2025, following customer well-related issues in the previous quarter. The company added a large fracturing fleet during the quarter, which is expected to enhance activity and financial performance.

Regarding capital expenditure, Calfrac forecasts a FY25 capex of $135 million, with an additional $30 million carried over from delayed FY24 capex, primarily for expansion in Argentina. This brings the total to $165 million, which is slightly above RBC’s estimate of $155 million. The company’s upgrade program aims to have the equivalent of five Tier 4 DGB fleets operating.