Back to top

Image: Bigstock

Cactus' (WHD) Q4 Earnings Beat Estimates, Revenues Miss

Read MoreHide Full Article

Cactus, Inc. (WHD - Free Report) reported fourth-quarter adjusted earnings of 57 cents per share, beating the Zacks Consensus Estimate of 51 cents. The bottom line rose from the year-ago quarter’s 25 cents.

Total quarterly revenues of $188 million missed the Zacks Consensus Estimate of $190 million. The top line, however, improved from the year-ago quarter’s $130 million.

The strong quarterly earnings were primarily driven by increased drilling activity by customers, offset partially by higher total expenses.

Business Segments

From the Product business, Cactus generated revenues of $124.6 million, increasing from $83.8 million in the December quarter of 2021. Gross profit from the business unit was $50.5 million, up from the year-ago quarter’s $29 million. The segment was supported by increased drilling activity by customers.

Cactus’ Rental revenues were $27.3 million, up from $19.2 million in the year-ago quarter. Gross income from the Rental unit was $12 million, which increased from $4.7 million. The segment was supported by declining repair costs along with a fall in depreciation expense.

From the Field Service and Other business segment, Cactus generated revenues of $35.9 million, up from $26.9 million in the year-ago quarter. Gross profit from the business unit was $8.6 million, up 75.6% due to a rise in ancillary services activity.

Expenses

The cost of product revenues was $74 million, which jumped from $54.7 million in the year-ago quarter. Also, the cost of rental revenues was $15.3 million, up from $14.6 million in the December quarter of 2021. The cost of field service and other revenues increased to $27.3 million from $22 million. As such, total expenses jumped to $139.6 million from the year-ago level of $104.2 million.

Capex and Cash Flow

Cactus’ fourth-quarter 2022 cash expenditure and other amount was $7.1 million. In the reported quarter, the operating cash flow was $39.3 million.

Balance Sheet

At the fourth-quarter end, Cactus had cash and cash equivalents of $344.5 million. It had no bank debt outstanding as of Dec 31, 2022.

Guidance

For 2023, Cactus gave its capital expenditure guidance in the band of $35 million to $45 million.

Zacks Rank & Stocks to Consider

Cactus currently carries a Zacks Rank #3 (Hold). Better-ranked players in the energy space include Halliburton Company (HAL - Free Report) , PBF Energy (PBF - Free Report) and Antero Midstream Corporation (AM - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Halliburton is well known for providing products and services to energy companies.  Over the past 30 days, HAL has witnessed upward earnings estimate revisions for 2023 and 2024. 

PBF Energy is a leading independent refiner in North America. PBF has lower exposure to debt capital than composite stocks belonging to the industry.

Antero Midstream generates stable cashflows, banking on its midstream assets involved in gathering, compression, processing and fractionation activities. The properties are centered around the prolific Appalachian Basin. Over the past 30 days, Antero Midstream has witnessed upward earnings estimate revisions for 2023.

Published in