Dril-Quip (DRQ) Q3 Earnings Lag Estimates, Revenues Increase Y/Y
Dril-Quip, Inc. DRQ reported a third-quarter 2023 adjusted loss of 15 cents per share, which missed the Zacks Consensus Estimate of earnings of 8 cents. The bottom line also declined from the year-ago quarter’s level of 5 cents.
The company’s registered total quarterly revenues of $117.2 million increased from the year-ago quarter’s figure of $88 million. The figure also beat the Zacks Consensus Estimate of $105 million.
Lower Subsea Services revenues and increasing total costs and expenses led to weak quarterly earnings.
Dril-Quip, Inc. Price, Consensus and EPS Surprise
Dril-Quip, Inc. price-consensus-eps-surprise-chart | Dril-Quip, Inc. Quote
Q3 Performance
Dril-Quip reported net bookings of $46.5 million for the quarter, down 25% year over year. At the end of the reported quarter, the company had $210 million in its backlog.
DRQ reported a third-quarter operating loss of $6.1 million, indicating a massive downturn from the prior-year period’s reported profit of $12.4 million.
Total Costs and Expenses
The cost of sales increased to $85.6 million from $65.7 million in the year-ago period. Engineering and product development costs also increased to $3.1 million from the year-ago figure of $2.6 million. Selling, general and administrative costs increased to $26.9 million from $22.4 million recorded a year ago.
Total costs and expenses were $123 million compared with $75.7 million registered in the corresponding period of 2022.
Free Cash Flow
In the third quarter, Dril-Quip generated a free cash flow of $21.4 million against a negative free cash flow of $9.2 million a year ago.
Financials
Dril-Quip recorded $5.4 million in capital expenditure for the quarter.
As of Sep 30, 2023, the company’s cash balance was $181.1 million. Its balance sheet is free of debt load, highlighting a sound financial position.
Guidance
DRQ expects revenues in the range of $115-$125 million for the fourth quarter of 2023. The company anticipates bookings in the band of $75-$100 million for the same quarter. It projects capital expenditure of $10 million for the remaining quarter.
Zacks Rank & Stocks to Consider
Dril-Quip currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked players in the energy sector are Liberty Energy Inc. LBRT, Matador Resources Company MTDR and Oceaneering International, Inc. OII, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Liberty reported third-quarter 2023 earnings of 85 cents per share, which beat the Zacks Consensus Estimate of 74 cents. The Denver-CO-based oil and gas equipment company’s outperformance reflects the impacts of strong execution and increased service pricing.
The company’s board of directors announced a cash dividend of 7 cents per common share, payable on Dec 20, 2023, to stockholders of record as of Dec 6, 2023. The dividend increased 40% from the previous quarter’s level.
Matador Resources reported third-quarter 2023 adjusted earnings of $1.86 per share, which beat the Zacks Consensus Estimate of $1.59. MTDR’s milestone led to better-than-expected third-quarter results, with the highest-ever total production averaging more than 135,000 barrels of oil and natural gas equivalent per day.
For the fourth quarter of 2023, MTDR expects an average daily oil equivalent production of 145,000 BOE. The recent guidance indicates a 2% upward revision from the previously mentioned 143,000 BOE/D.
Oceaneering International reported third-quarter 2023 adjusted earnings of 38 cents per share, which beat the Zacks Consensus Estimate of 27 cents. OII’s outperformance was largely due to robust results in certain segments.
For the fourth quarter of 2023, OII anticipates a decline in EBITDA on relatively flat revenues compared with the third-quarter results.
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