RPC (RES) Q3 Earnings Lag Estimates, Revenues Fall Y/Y
RPC Inc. RES reported third-quarter adjusted earnings of 8 cents per share, which missed the Zacks Consensus Estimate of 24 cents. The bottom line also declined from the year-ago quarter’s level of 32 cents.
Total quarterly revenues declined to $330 million from $460 million recorded in the prior-year quarter. The top line also missed the Zacks Consensus Estimate of $378 million.
Weak quarterly results can be attributed to a year-over-year decline in average domestic rig count, coupled with lower oil and natural gas prices.
RPC, Inc. Price, Consensus and EPS Surprise
RPC, Inc. price-consensus-eps-surprise-chart | RPC, Inc. Quote
Segmental Performance
Operating profit at the Technical Services segment totaled $18.9 million, lower than the year-ago quarter’s level of $89.5 million. The sharp decline can be attributed to reduced revenues in the primary service line, which is pressure pumping.
Operating profit at the Support Services segment amounted to $6.9 million, higher than the year-ago quarter’s level of $5.3 million. The rise resulted from increased activities and improved pricing.
Total operating profit in the quarter was $22.7 million, down from $92.2 million reported in the year-ago quarter. The average domestic rig count was 649, marking a 14.7% decline from the year-ago quarter’s level. The average oil price in the quarter was $82.17 per barrel, down 11.5% from the year-ago quarter’s level. The average price of natural gas was $2.59 per thousand cubic feet, down 67.8% from that recorded in the corresponding period of 2022.
Costs and Expenses
In third-quarter 2023, the cost of revenues decreased from $309.8 million to $239.1 million. Selling, general and administrative expenses increased to $42 million from the year-ago quarter’s figure of $38.2 million.
Financials
RPC’s total capital expenditure for the September-end quarter of 2023 was $44.3 million.
As of Sep 30, RPC had cash and cash equivalents of $171.9 million, up sequentially from $100.5 million. Nonetheless, the company managed to maintain a debt-free balance sheet.
Outlook
For 2023, the company reiterated its capital expenditure guidance between $200 million and $250 million. The metric indicates an increase from $140 million reported in 2022.
Zacks Rank & Stocks to Consider
RPC currently carries a Zack Rank #5 (Strong Sell).
Some better-ranked players in the energy sector are Liberty Energy Inc. LBRT and Matador Resources Company MTDR, both currently sporting a Zacks Rank #1 (Strong Buy), and APA Corporation APA, carrying a Zacks Rank #2 (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.
Liberty’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.
APA released supplemental information regarding its financial and operational results for the third quarter of 2023. The company expects its quarterly total adjusted production and adjusted oil production to be in the upper half of its guidance range. This can be mainly attributed to strong Permian oil and U.K. North Sea volumes.
APA expects adjusted production and adjusted oil production figures to fall within the upper half of its guided range. The company anticipates adjusted production in the range of 337-339 Mboe/d and adjusted oil production in the band of 159-161 Mboe/d. It is scheduled to release third-quarter results on Nov 1.
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