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Dril-Quip (DRQ) Down 3.9% Since Q2 Earnings & Revenues Miss
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Dril-Quip, Inc.’s (DRQ - Free Report) shares have declined 3.9% since it reported weak second-quarter results on Jul 29. It still expects full-year 2021 revenues to not exceed the 2020 level despite the ongoing recovery in energy demand, which might have concerned investors.
It reported second-quarter 2021 adjusted loss per share of 53 cents, wider than the Zacks Consensus Estimate of a loss of 8 cents. Further, the reported figure deteriorated from the year-ago loss of 34 cents per share.
It registered total revenues of $80.8 million for the quarter, lower than $90.4 million in the year-ago period. Moreover, the figure missed the Zacks Consensus Estimate of $88 million.
The weak second-quarter results were caused by a deterioration of the services business due to lower offshore oil and gas activities. In addition, forge facility lease cancellation and a rise in compensation accrual affected the results.
Dril-Quip reported product bookings of $50.4 million for the quarter. At quarter-end, it had $191 million in backlog.
The company recorded second-quarter operating loss of $14.7 million, wider than a loss of $7.5 million in the prior-year period due to unfavorable product revenue mix and forge lease termination.
Total Costs and Expenses
On the cost front, cost of sales declined to $61.5 million for the reported quarter from $66.9 million in the year-ago period. Further, engineering and product development costs fell to $3.7 million for the quarter from the year-ago figure of $5.4 million. SG&A costs, however, bumped to $29.6 million from $23.3 million a year ago.
Total cost and expenses for the quarter totaled $95.5 million compared with $98 million a year ago.
Free Cash Flow
Dril-Quip’s free cash flow for the second quarter was $8.2 million against free cash outflow of $1.1 million a year ago.
Financials
The company recorded $3.5 million capital expenditure for the quarter versus the year-ago level of $4.1 million.
As of Jun 30, 2021, its cash balance was $370.5 million, up from $362.2 million at first quarter-end. It had total available liquidity of $395.6 million. The company’s balance sheet is free of debt load, which highlights a sound financial position.
Guidance
Earlier, the leading manufacturer of highly engineered drilling and production equipment stated that it expects product bookings of $40-$60 million per quarter for 2021. Now, it expects the numbers to increase in the second half of the year from first-half levels. Capital expenditure for the year is expected within $12-$15 million, down from previous expectation of $15-$17 million. Revenues for 2021 are expected to be a bit lower than the 2020 level of $365 million.
The company added that the business scenario, which suffered due to the coronavirus pandemic, is in recovery mode. With improved performance in the second half of 2021, clients are expected to allocate more resources for the next year, which in turn, will boost demand for Dril-Quip’s equipment. It expects the subsea equipment market to not only recover but expand in the coming years.
The Zacks Consensus Estimate for Range Resources’ earnings for 2021 is pegged at $1.53 per share, indicating a massive improvement from the year-ago loss of 9 cents.
NOW’s profits for 2021 are expected to jump 100% year over year.
Braskem’s bottom line for 2021 is expected to surge 326.7% year over year.
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Dril-Quip (DRQ) Down 3.9% Since Q2 Earnings & Revenues Miss
Dril-Quip, Inc.’s (DRQ - Free Report) shares have declined 3.9% since it reported weak second-quarter results on Jul 29. It still expects full-year 2021 revenues to not exceed the 2020 level despite the ongoing recovery in energy demand, which might have concerned investors.
It reported second-quarter 2021 adjusted loss per share of 53 cents, wider than the Zacks Consensus Estimate of a loss of 8 cents. Further, the reported figure deteriorated from the year-ago loss of 34 cents per share.
It registered total revenues of $80.8 million for the quarter, lower than $90.4 million in the year-ago period. Moreover, the figure missed the Zacks Consensus Estimate of $88 million.
The weak second-quarter results were caused by a deterioration of the services business due to lower offshore oil and gas activities. In addition, forge facility lease cancellation and a rise in compensation accrual affected the results.
DrilQuip, Inc. Price, Consensus and EPS Surprise
DrilQuip, Inc. price-consensus-eps-surprise-chart | DrilQuip, Inc. Quote
Second-Quarter Performance
Dril-Quip reported product bookings of $50.4 million for the quarter. At quarter-end, it had $191 million in backlog.
The company recorded second-quarter operating loss of $14.7 million, wider than a loss of $7.5 million in the prior-year period due to unfavorable product revenue mix and forge lease termination.
Total Costs and Expenses
On the cost front, cost of sales declined to $61.5 million for the reported quarter from $66.9 million in the year-ago period. Further, engineering and product development costs fell to $3.7 million for the quarter from the year-ago figure of $5.4 million. SG&A costs, however, bumped to $29.6 million from $23.3 million a year ago.
Total cost and expenses for the quarter totaled $95.5 million compared with $98 million a year ago.
Free Cash Flow
Dril-Quip’s free cash flow for the second quarter was $8.2 million against free cash outflow of $1.1 million a year ago.
Financials
The company recorded $3.5 million capital expenditure for the quarter versus the year-ago level of $4.1 million.
As of Jun 30, 2021, its cash balance was $370.5 million, up from $362.2 million at first quarter-end. It had total available liquidity of $395.6 million. The company’s balance sheet is free of debt load, which highlights a sound financial position.
Guidance
Earlier, the leading manufacturer of highly engineered drilling and production equipment stated that it expects product bookings of $40-$60 million per quarter for 2021. Now, it expects the numbers to increase in the second half of the year from first-half levels. Capital expenditure for the year is expected within $12-$15 million, down from previous expectation of $15-$17 million. Revenues for 2021 are expected to be a bit lower than the 2020 level of $365 million.
The company added that the business scenario, which suffered due to the coronavirus pandemic, is in recovery mode. With improved performance in the second half of 2021, clients are expected to allocate more resources for the next year, which in turn, will boost demand for Dril-Quip’s equipment. It expects the subsea equipment market to not only recover but expand in the coming years.
Zacks Rank & Stocks to Consider
The company currently has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks from the energy space include Range Resources Corporation (RRC - Free Report) , NOW Inc. (DNOW - Free Report) and Braskem S.A. (BAK - Free Report) , each having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Range Resources’ earnings for 2021 is pegged at $1.53 per share, indicating a massive improvement from the year-ago loss of 9 cents.
NOW’s profits for 2021 are expected to jump 100% year over year.
Braskem’s bottom line for 2021 is expected to surge 326.7% year over year.