RPC (RES) Shares Dip 8% Despite Reporting Strong Q2 Earnings
RPC Inc. RES shares have declined 8% since reporting second-quarter 2023 earnings on Jul 26. This stock performance can be attributed to the declining fundamentals of the company.
RPC posted second-quarter adjusted earnings of 30 cents per share, which increased from the year-ago quarter’s 22 cents.
Total quarterly revenues of $416 million also improved from the year-ago figure of $375.5 million.
Strong quarterly earnings were primarily driven by rising activity levels in all service lines.
RPC, Inc. Price, Consensus and EPS Surprise
RPC, Inc. price-consensus-eps-surprise-chart | RPC, Inc. Quote
Segmental Performance
Operating profit in the Technical Services segment totaled $77 million, higher than the year-ago quarter’s profit of $59.8 million. The upside was caused by increased customer activities, along with higher pricing and a larger active fleet of revenue-producing equipment.
Operating profit in the Support Services segment was $7.9 million, higher than the year-ago quarter’s profit of $3.3 million. The rise resulted from increased activities and improved pricing.
Total operating profit in the quarter was $82.4 million, increasing from the $60.4 million reported in the year-ago quarter. The average domestic rig count was 719, unchanged from the year-ago level. The average oil price in the quarter was $73.54 per barrel. The same for natural gas was $2.16 per thousand cubic feet.
Costs and Expenses
In second-quarter 2023, the cost of revenues increased from $260.9 million to $265.8 million. Selling, general and administrative expenses increased to $43.6 million from the year-ago figure of $35.9 million.
Financials
RPC’s total capital expenditure for the June-end quarter of 2023 amounted to $39.2 million.
As of Jun 30, RPC had cash and cash equivalents of $100.5 million, down sequentially from $177.9 million. Nonetheless, the company managed to maintain a debt-free balance sheet.
Outlook
For 2023, the company lowered its capital expenditure guidance to $200-$250 million from the prior mentioned $250-$300 million. The metric also indicates an increase from the $140 million reported in 2022.
Zacks Rank & Stocks to Consider
RPC currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector may look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Baker Hughes Company BKR reported second-quarter 2023 adjusted earnings of 39 cents per share, beating the Zacks Consensus Estimate of 32 cents. Strong quarterly results were primarily driven by higher contributions from the Oilfield Services and Equipment, and Industrial & Energy Technology business units.
For 2023, Baker Hughes expects revenues of $24.8-$26 billion. The company projects revenues of $6.4-$6.6 billion for the third quarter.
Crestwood Equity Partners LP CEQP reported second-quarter 2023 adjusted earnings of $1.16 per unit, surpassing the Zacks Consensus Estimate of 26 cents. Strong quarterly earnings resulted from fantastic contributions from the Storage and Logistics business unit.
For this year, the partnership projects adjusted EBITDA of $780-$860 million.
Oceaneering International OII reported a second-quarter 2023 adjusted profit of 18 cents per share, which missed the Zacks Consensus Estimate of 30 cents. This underperformance was due to lower-than-expected operating income from the Subsea Robotics and Manufactured Products segments.
For 2023, Oceaneering projects consolidated EBITDA of $2275-$310 million and a continued free cash flow generation of $90-$130 million.
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