Cactus (WHD) Shares Rise 6.8% Since Q3 Earnings Beat Estimates
Cactus, Inc.’s WHD shares have gained 6.8% after reporting strong earnings for the third quarter of 2022.
The company reported third-quarter adjusted earnings of 52 cents per share, beating the Zacks Consensus Estimate of 49 cents. The bottom line rose from the year-ago quarter’s 19 cents.
Total quarterly revenues of $184.5 million outpaced the Zacks Consensus Estimate of $183 million. The top line also improved from the year-ago quarter’s $115.4 million.
The strong quarterly results were primarily driven by higher sales of wellhead and production-related equipment, resulting from improved U.S. drilling activities.
Cactus, Inc. Price, Consensus and EPS Surprise
Cactus, Inc. price-consensus-eps-surprise-chart | Cactus, Inc. Quote
Business Segments
From the Product business, Cactus generated revenues of $121.8 million, increasing from $74.8 million in the September-end quarter of 2021. Gross profit from the business unit was $48 million, up from the year-ago quarter’s $25.1 million. The segment was supported by increased U.S. drilling activity, which triggered sales of wellhead and production-related equipment.
Cactus’ Rental revenues were $27.1 million, up from $15.3 million in the year-ago quarter. Gross income from the Rental unit was $10.8 million, which increased from the year-ago quarter’s $2 million. The segment was supported by higher customer activity.
From the Field Service and Other business segment, Cactus generated revenues of $35.6 million, up from $25.3 million in the year-ago quarter. Gross profit from the business unit was $8.4 million, up 46.5% year over year due to increased customer activities, resulting in higher billable hours.
Expenses
The cost of product revenues was $73.7 million, which jumped from $49.7 million in the year-ago quarter. Also, the cost of rental revenues was $16.3 million, up from $13.3 million in the September-end quarter of 2021. The cost of field service and other revenues increased to $27.1 million from $19.5 million a year ago. As such, total expenses jumped to $133.2 million from the year-ago level of $94.6 million.
Capex and Cash Flow
Cactus’ third-quarter 2022 cash investment amount was $6.6 million. For the reported quarter, the operating cash flow was $30.4 million.
Balance Sheet
At the third-quarter end, Cactus had cash and cash equivalents of $320.6 million. It had no bank debt outstanding as of Sept 30, 2022.
Guidance
For 2022, Cactus gave its capital expenditure guidance of $25 million.
Zacks Rank & Other Stocks to Consider
Cactus currently flaunts a Zacks Rank #1 (Strong Buy).
Investors interested in the energy sector might look at the following stocks that reported solid third-quarter earnings numbers and presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Williams Companies, Inc. WMB reported third-quarter 2022 adjusted earnings per share of 48 cents, beating the Zacks Consensus Estimate of 44 cents. The outperformance resulted from higher-than-expected contributions from a couple of segments.
WMB maintained its 2022 adjusted EBITDA guidance of $6.1-$6.4 billion, with growth capital spending anticipated to be $1.25-$1.35 billion. Further, Williams expects a leverage ratio mid-point of 3.6, lower than the original guidance of 3.8.
Murphy USA Inc. MUSA reported third-quarter 2022 earnings per share of $9.28, beating the Zacks Consensus Estimate of $7.82. The outperformance could be attributed to a rise in the retail gasoline price and a higher retail margin of 37.6 cents per gallon, up 41.4% year over year.
In more good news for investors, MUSA’s board of directors recently declared a quarterly cash dividend of 35 cents per share to its common shareholders of record as of Nov 8. The payout, which represents a 9% sequential increase, will be made on Dec 1.
Liberty Energy Inc. LBRT announced third-quarter 2022 earnings per share of 78 cents, which handily beat the Zacks Consensus Estimate of 63 cents. The outperformance reflects the impact of strong execution, higher activity and increased service pricing, which more than offset rising costs.
As of Sep 30, 2022, Liberty had $298 million of available liquidity, including $24 million of cash on hand and supported by the revolving credit facility. LBRT’s debt-to-capitalization stands at just 15.2% compared with most peers that are hugely burdened with debts.
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