RPC Inc. Q1 2024 Earnings Miss Estimates Amid Declining Revenue

RPC Inc. reports Q1 2024 results, with earnings and revenue falling short of expectations due to lower industry activity and competitive pressures. The company remains focused on operational efficiency and strategic investments to navigate the challenging market conditions.

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Shivani Chauhan
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RPC Inc. Q1 2024 Earnings Miss Estimates Amid Declining Revenue

RPC Inc. Q1 2024 Earnings Miss Estimates Amid Declining Revenue

RPC Inc. reports first quarter (NYSE:RES) financial results on April 25th, with earnings and revenue falling short of analyst expectations. The oilfield services company posted adjusted earnings of $27.47 million, or $0.13 per share, compared to $71.52 million, or $0.33 per share, in the same quarter last year. Analysts had anticipated earnings of $0.17 per share for the quarter.

RPC's revenue for the quarter declined 20.7% year-over-year to $377.83 million, missing the consensus estimate of $390.92 million. The company attributed the revenue decrease to lower industry activity and competitive pricing pressures. Cost of revenues also decreased, but at a slower pace than the revenue decline due to the fixed nature of certain costs. Selling, general and administrative expenses rose as a result of higher employment costs.

Net income for the quarter came in at $27.5 million, down from $40.3 million in the previous quarter. Diluted earnings per share were $0.13, a decrease from $0.19 in the prior quarter. Adjusted EBITDA stood at $63.1 million, a decline from $79.5 million in the preceding quarter, with the margin contracting by 340 basis points to 16.7%.

As of March 31, 2024, RPC had $212.2 million in cash and no outstanding borrowings. The company plans to deploy a new Tier 4 dual fuel fleet in mid-2024 and continue making strategic investments and potential acquisitions. RPC also remains committed to returning capital to shareholders through dividends and share repurchase programs.

In the earnings release, RPC's management acknowledged the challenging market conditions and emphasized the company's focus on operational efficiency and cost management. "Our first quarter results reflect the impact of lower industry activity and increased competition," said RPC's CEO. "Despite these headwinds, we remain committed to delivering value to our customers and shareholders through strategic investments and disciplined capital allocation."

Why this matters: RPC's earnings miss and declining revenue highlight the ongoing challenges faced by oilfield services companies amid volatile energy markets and increased competition. The company's performance serves as a bellwether for the broader industry, signaling potential headwinds for other players in the sector.

Looking ahead, RPC's management expressed cautious optimism, noting that the company is well-positioned to navigate the current market environment. With a strong balance sheet and plans for strategic investments, RPC aims to capitalize on future opportunities and maintain its competitive position in the oilfield services industry. However, the company acknowledged that the pace of recovery in industry activity remains uncertain, and it will continue to closely monitor market conditions and adjust its strategies accordingly.

Key Takeaways

  • RPC Inc. reported Q1 2024 earnings and revenue below analyst estimates.
  • Revenue declined 20.7% YoY to $377.83M, missing $390.92M consensus.
  • Net income fell to $27.5M from $40.3M in prior quarter, EPS at $0.13.
  • RPC plans to deploy new Tier 4 dual fuel fleet and make strategic investments.
  • RPC's performance signals challenges for oilfield services amid volatile markets.