GasFrac -- Is there bad news coming?

I write often about Gasfrac Energy Services (symbol GFS in Canada and GSFVF on the pink sheets). Gasfrac is one of the best long term plays in the market; it seems destined for rapid growth and high profits. There is some seemingly unimportant news out now, however which gives me pause about the short term prospects for the company.

Yesterday, Gasfrac announced that its earnings would be issued after the close of the market on Friday March 16th and the conference call would follow on Monday March 19th. This is ominous. It is very unusual for companies to issue earnings reports on Fridays, particularly after the close of the market. Indeed, reports issued at that time frequently contain bad news. Often the company hopes to bury the news with a release when no one is looking, or management wants to give the market a chance to digest the bad news over the weekend before having the chance to sell. There is no way to know for certain if GasFrac is going to announce poor earnings or a revenue miss in March. It is unlikely that there is any other bad news coming at that time. There is over a month to go until that release, and any bad news other than with the earnings themselves would need to be made public sooner.

Of course, there is always the possibility that management just made a poor choice in picking the time for the earnings release. The new leadership, however, has already shown itself to be quite adept at public relations, so it is hard to imagine that management was unaware of the bad implication of a Friday afternoon earnings report.

Hopefully, there will be no problem with the report and the fears expressed here will be unfounded. More likely, however, is that there will be some pothole on the road to higher revenues and earnings. Indeed, the company recent completed an offering of convertible debentures which was oversubscribed. The prospectus for the bonds said nothing about the results for the fourth quarter of 2011, but the underwriters surely investigated the preliminary results. I doubt that the underwriters would move ahead with the bond issuance if there were a serious problem at the company.

So, in summary, there is this troublesome news. It may mean problems ahead for GasFrac, but in all likelihood these will be short term difficulties.

DISCLOSURE: I remain long GasFrac stock but have reduced my holdings somewhat in response to the news discussed above.