We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
RPC (RES) Q2 Earnings Outpace Estimates, Revenues Lag
Read MoreHide Full Article
RPC Inc. (RES - Free Report) reported second-quarter 2024 adjusted earnings of 15 cents per share, which beat the Zacks Consensus Estimate of 13 cents. The bottom line declined from the year-ago quarter’s figure of 30 cents.
Total quarterly revenues were $364.2 million, down from the year-ago quarter’s $415.9 million. The top line also missed the Zacks Consensus Estimate of $386 million.
The better-than-expected quarterly earnings were driven by margin improvement across various key service lines and lower cost of revenues. However, the positives were partially offset by lower activity levels in pressure pumping.
Operating profit in the Technical Services segment totaled $30.2 million, lower than the year-ago quarter’s $77 million. The results were primarily influenced by decreased activity levels in pressure pumping, leading to negative impacts on fixed costs, especially labor, due to reduced leverage.
Operating profit in the Support Services segment amounted to $4.4 million, lower than the year-ago quarter’s $7.9 million. The results were driven by higher activity within rental tools, partially offset high fixed-cost structure inherent in these service lines.
Total operating profit in the quarter was $35.5 million, down from $82.4 million reported in the year-ago quarter. The average domestic rig count was 603, marking a 16.1% decline from the year-ago quarter’s level.
The average oil price in the quarter was $81.78 per barrel, up 11.2% year over year. The average price of natural gas was $2.07 per thousand cubic feet, down 4.2% from the figure recorded in the corresponding period of 2023.
Costs & Expenses
In the second quarter, the cost of revenues decreased to $262.3 million from $265.8 million in the prior-year period. Selling, general and administrative expenses amounted to $37.4 million, lower than the year-ago quarter’s $43.6 million.
Financials
RPC’s total capital expenditure was $75 million.
As of Jun 30, the company had cash and cash equivalents of $261.5 million, andmanaged to maintain a debt-free balance sheet.
Outlook
The company reiterated its capex guidance for 2024 between $200 million ad $250 million.
SM Energy is an upstream energy firm operating in the prolific Midland Basin and the South Texas regions. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
VAALCO Energy is an independent energy company involved in upstream operation business with a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 125,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
RPC (RES) Q2 Earnings Outpace Estimates, Revenues Lag
RPC Inc. (RES - Free Report) reported second-quarter 2024 adjusted earnings of 15 cents per share, which beat the Zacks Consensus Estimate of 13 cents. The bottom line declined from the year-ago quarter’s figure of 30 cents.
Total quarterly revenues were $364.2 million, down from the year-ago quarter’s $415.9 million. The top line also missed the Zacks Consensus Estimate of $386 million.
The better-than-expected quarterly earnings were driven by margin improvement across various key service lines and lower cost of revenues. However, the positives were partially offset by lower activity levels in pressure pumping.
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 $30.2 million, lower than the year-ago quarter’s $77 million. The results were primarily influenced by decreased activity levels in pressure pumping, leading to negative impacts on fixed costs, especially labor, due to reduced leverage.
Operating profit in the Support Services segment amounted to $4.4 million, lower than the year-ago quarter’s $7.9 million. The results were driven by higher activity within rental tools, partially offset high fixed-cost structure inherent in these service lines.
Total operating profit in the quarter was $35.5 million, down from $82.4 million reported in the year-ago quarter. The average domestic rig count was 603, marking a 16.1% decline from the year-ago quarter’s level.
The average oil price in the quarter was $81.78 per barrel, up 11.2% year over year. The average price of natural gas was $2.07 per thousand cubic feet, down 4.2% from the figure recorded in the corresponding period of 2023.
Costs & Expenses
In the second quarter, the cost of revenues decreased to $262.3 million from $265.8 million in the prior-year period. Selling, general and administrative expenses amounted to $37.4 million, lower than the year-ago quarter’s $43.6 million.
Financials
RPC’s total capital expenditure was $75 million.
As of Jun 30, the company had cash and cash equivalents of $261.5 million, andmanaged to maintain a debt-free balance sheet.
Outlook
The company reiterated its capex guidance for 2024 between $200 million ad $250 million.
Zacks Rank and Key Picks
Currently, RES carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the energy sector are SM Energy (SM - Free Report) , VAALCO Energy (EGY - Free Report) and Energy Transfer LP (ET - Free Report) . SM Energy presently sports a Zacks Rank #1 (Strong Buy), while VAALCO and Energy Transfer carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy is an upstream energy firm operating in the prolific Midland Basin and the South Texas regions. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
VAALCO Energy is an independent energy company involved in upstream operation business with a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 125,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.