Dril-Quip (DRQ) Down 19% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Dril-Quip (DRQ). Shares have lost about 19% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Dril-Quip due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Dril-Quip Q4 Earnings Beat Estimates
Dril-Quip reported fourth-quarter adjusted earnings of 6 cents per share, which beat the Zacks Consensus Estimate of a loss of 4 cents. The bottom line improved from the year-ago loss of 46 cents per share.
The company’s total quarterly revenues of $97 million increased from the year-ago quarter’s $78 million.
Strong quarterly earnings were supported by an increase in product bookings due to improving market conditions.
Q4 Performance
Dril-Quip reported product bookings of $93.8 million for the quarter. The company’s 2022 backlog increased 15% year over year as product bookings increased due to improving market conditions.
The company reported a fourth-quarter operating loss of $2.4 million, narrower than a loss of $71.7 million in the prior-year period.
Total Costs and Expenses
The cost of sales increased to $66.6 million for the reported quarter from $61.2 million in the year-ago period. However, engineering and product development costs contracted to $2.7 million in the quarter from the year-ago figure of $3.8 million. Selling, general and administrative costs declined to $26.9 million from $30.6 million a year ago.
Total costs and expenses for the quarter were $99.2 million compared with $149.6 million a year ago.
Free Cash Flow
In the fourth quarter, Dril-Quip generated a negative free cash flow of $22.8 million against a cash flow of $2.6 million a year ago.
Financials
Dril-Quip recorded $5.2 million in capital expenditure for the quarter versus the year-ago level of $2.1 million.
As of Dec 31, 2022, the company’s cash balance was $264.8 million. Its balance sheet is free of debt load, highlighting a sound financial position.
Guidance
For 2022, Dril-Quip expects product bookings to increase 10-20% year over year. The company revealed its capital expenditure guidance of $25-$30 million for the year, indicating an increase from the $18.9 million reported in 2022.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
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Dril-Quip, Inc. (DRQ) : Free Stock Analysis Report
