Oil States International Inc (OIS) Reports Q3 2023 Earnings
Net income of $4.2 million, or $0.07 per diluted share, reported for Q3 2023
Consolidated revenue of $194.3 million, a 6% sequential increase
Offshore/Manufactured Products segment revenue increased 18% sequentially to $111.0 million
Operating cash flow of $13.6 million generated in the quarter
Oil States International Inc (NYSE:OIS) released its Q3 2023 earnings report on October 27, 2023. The company reported a net income of $4.2 million, or $0.07 per diluted share, and an adjusted EBITDA of $23.4 million. The consolidated revenue of $194.3 million marked a 6% sequential increase, boosted by higher offshore and international activity.
Financial Highlights
Oil States International Inc (NYSE:OIS) reported a significant increase in its Offshore/Manufactured Products segment revenue, which rose 18% sequentially to $111.0 million. This is the highest level reported since the fourth quarter of 2016. The segment's backlog also increased sequentially for a fifth consecutive quarter, totaling $348 million as of September 30.
The company generated an operating cash flow of $13.6 million in the quarter. However, it incurred facility consolidation charges of $1.6 million ($1.3 million after-tax, or $0.02 per share) associated with the planned sales of certain manufacturing and service locations and the relocation of related equipment.
CEO Commentary
Our third quarter results benefited from growth in offshore and international spending, with significant sequential and year-over-year increases in offshore-project activity and backlog conversion. However, our quarterly performance was tempered by an industry-wide decline in U.S. well completions which has been ongoing since the start of 2023. We believe the U.S. activity declines were triggered by weaker commodity prices in effect earlier this year. With currently improved commodity pricing, we expect U.S. activity to recover into 2024." - Cindy B. Taylor, Oil States' President and Chief Executive Officer
Financial Tables Summary
The company's consolidated results showed a 6% sequential and 3% year-over-year increase in revenues, reaching $194.3 million. Operating income rose by 89% sequentially and 22% year-over-year to $6.2 million. Net income saw a significant increase of 655% sequentially and 97% year-over-year, reaching $4.2 million. Diluted earnings per share also increased by 600% sequentially and 133% year-over-year to $0.07.
In terms of segment revenues, the Offshore/Manufactured Products segment saw an 18% sequential and 16% year-over-year increase, reaching $111.0 million. However, the Well Site Services and Downhole Technologies segments saw decreases in their revenues.
Outlook
Oil States International Inc (NYSE:OIS) remains encouraged by the continued up-cycle in offshore and international activity, customer acceptance of recent technology introductions, and growing backlog levels in the Offshore/Manufactured Products segment. With an improving commodity price environment, the company expects U.S. activity to recover into 2024.
Explore the complete 8-K earnings release (here) from Oil States International Inc for further details.
This article first appeared on GuruFocus.
