Dril-Quip (DRQ) Lags on Q2 Earnings, Raises '23 Revenue Target
Dril-Quip, Inc. DRQ reported a second-quarter 2023 adjusted loss of 3 cents per share against the Zacks Consensus Estimate of earnings of 4 cents. The bottom line improved from the year-ago quarter’s loss of 10 cents per share.
The company’s registered total quarterly revenues of $89.6 million, which declined from the year-ago quarter’s $94 million.
Lower Subsea Product and Subsea Services revenues led to lower-than-expected quarterly earnings. The negatives were partially offset by the improved performance of the key offshore markets and some reemerging areas.
Dril-Quip, Inc. Price, Consensus and EPS Surprise
Dril-Quip, Inc. price-consensus-eps-surprise-chart | Dril-Quip, Inc. Quote
Q2 Performance
Dril-Quip reported net bookings of $72.7 million for the quarter. At the second-quarter end, it had $252 million in the backlog.
The company reported a second-quarter operating income of $3.6 million, turning around from a loss of $3.9 million in the prior-year period.
Total Costs and Expenses
The cost of sales declined to $65.7 million in the reported quarter from $69.7 million in the year-ago period. However, engineering and product development costs increased to $3.2 million from the year-ago figure of $2.7 million. Selling, general and administrative costs increased to $23.2 million from $22.5 million a year ago.
Total costs and expenses in the quarter were $86 million compared with $97.8 million a year ago.
Free Cash Flow
In the second quarter, Dril-Quip generated a free cash flow of $1.1 million against a negative free cash flow of $10.6 million a year ago.
Financials
Dril-Quip recorded $10.2 million in capital expenditure for the quarter.
As of Jun 30, 2023, the company’s cash balance was $236.5 million. Its balance sheet is free of debt load, highlighting a sound financial position.
Guidance
For 2023, Dril-Quip raised its revenue target to 20% growth from that reported in 2022. DRQ expects to generate revenues of $240-$250 million in the second half of 2023.
For 2023, Dril-Quip anticipates product bookings to increase 10-20% year over year. DRQ revealed its capital expenditure guidance of $30 million for the year, indicating an increase from the $18.9 million reported in 2022.
Zacks Rank & Stocks to Consider
Dril-Quip currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy sector are Oceaneering International, Inc. OII, Global Partners GLP and Evolution Petroleum Corporation EPM, currently sporting a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
One of the leading suppliers of integrated technology solutions, Oceaneering boasts an impressive portfolio of diversified products and services.
Oceaneering has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for OII’s 2023 and 2024 earnings per share is pegged at $1 and $1.34, respectively.
Global Partners is a leading operator of gasoline stations and convenience stores. Over the past 30 days, GLP has witnessed upward earnings estimate revisions for 2023 and 2024, respectively.
The Zacks Consensus Estimate for Global Partners’ 2023 and 2024 earnings per share is pegged at $3.85 and $3.61, respectively. GLP currently has a Zacks Style Score of A for Value.
Evolution Petroleum is an independent energy company. EPM has a Zacks Style Score of A for Growth.
Evolution Petroleum has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for EPM’s 2023 and 2024 earnings per share is pegged at $1.11 and $1.08, respectively.
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