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Dril-Quip (DRQ) Gains Despite Q3 Earnings & Revenue Miss
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Dril-Quip, Inc.’s (DRQ - Free Report) stock rallied marginally despite reporting weak results for the third quarter of 2021 on Oct 28. This is probably because the manufacturer of highly engineered drilling and production equipment expects an improvement in the business scenario in the near future.
The company reported third-quarter 2021 adjusted loss per share of 35 cents, wider than the Zacks Consensus Estimate of a loss of 12 cents. The reported figure deteriorated from the year-ago profit of 44 cents per share.
It registered total revenues of $83 million for the quarter, lower than $91 million in the year-ago period. The figure missed the Zacks Consensus Estimate of $89 million.
The weak third-quarter results were caused by a deterioration in product revenues from the Asia Pacific and Eastern Hemisphere. This happened since customer orders got delayed and activities got hurt by the coronavirus pandemic.
Dril-Quip reported product bookings of $41 million for the quarter. At quarter-end, it had $179 million in backlog.
The company reported third-quarter operating loss of $6.9 million, wider than a loss of $2.1 million in the prior-year period.
Total Costs and Expenses
On the cost front, cost of sales declined to $62.8 million for the reported quarter from $67.2 million in the year-ago period. Further, engineering and product development costs contracted to $3.5 million for the quarter from the year-ago figure of almost $4 million. SG&A costs, however, bumped up to $25.3 million from $20.8 million a year ago.
Total cost and expenses for the quarter were $89.9 million compared with $93.4 million a year ago.
Free Cash Flow
Dril-Quip’s free cash flow for the third quarter was $7 million, declining from $11.9 million a year ago.
Financials
The company recorded $2.3 million in capital expenditure for the quarter versus the year-ago level of $1.9 million.
As of Sep 30, 2021, its cash balance was $375.2 million. It had total available liquidity of $406.3 million. The company’s balance sheet is free of debt load, which highlights a sound financial position.
Guidance
The leading manufacturer of highly engineered drilling and production equipment expects increasing activities from its independent exploration and production customers in the December quarter and the first half of next year, thanks to recovering commodity prices.
Zacks Rank & Stocks to Consider
The company carries a Zacks Rank #4 (Sell). A few better-ranked stocks from the energy space include Whiting Petroleum Corporation , Comstock Resources, Inc. (CRK - Free Report) and APA Corporation (APA - Free Report) . While Comstock carries a Zacks Rank #2 (Buy), while Whiting Petroleum and APA Corporation sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days.
Comstock is expected to witness earnings growth of 378.3% in 2021.
APA Corporation has seen upward earnings estimate revisions for 2021 in the past 30 days.
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Dril-Quip (DRQ) Gains Despite Q3 Earnings & Revenue Miss
Dril-Quip, Inc.’s (DRQ - Free Report) stock rallied marginally despite reporting weak results for the third quarter of 2021 on Oct 28. This is probably because the manufacturer of highly engineered drilling and production equipment expects an improvement in the business scenario in the near future.
The company reported third-quarter 2021 adjusted loss per share of 35 cents, wider than the Zacks Consensus Estimate of a loss of 12 cents. The reported figure deteriorated from the year-ago profit of 44 cents per share.
It registered total revenues of $83 million for the quarter, lower than $91 million in the year-ago period. The figure missed the Zacks Consensus Estimate of $89 million.
The weak third-quarter results were caused by a deterioration in product revenues from the Asia Pacific and Eastern Hemisphere. This happened since customer orders got delayed and activities got hurt by the coronavirus pandemic.
DrilQuip, Inc. Price, Consensus and EPS Surprise
DrilQuip, Inc. price-consensus-eps-surprise-chart | DrilQuip, Inc. Quote
Third-Quarter Performance
Dril-Quip reported product bookings of $41 million for the quarter. At quarter-end, it had $179 million in backlog.
The company reported third-quarter operating loss of $6.9 million, wider than a loss of $2.1 million in the prior-year period.
Total Costs and Expenses
On the cost front, cost of sales declined to $62.8 million for the reported quarter from $67.2 million in the year-ago period. Further, engineering and product development costs contracted to $3.5 million for the quarter from the year-ago figure of almost $4 million. SG&A costs, however, bumped up to $25.3 million from $20.8 million a year ago.
Total cost and expenses for the quarter were $89.9 million compared with $93.4 million a year ago.
Free Cash Flow
Dril-Quip’s free cash flow for the third quarter was $7 million, declining from $11.9 million a year ago.
Financials
The company recorded $2.3 million in capital expenditure for the quarter versus the year-ago level of $1.9 million.
As of Sep 30, 2021, its cash balance was $375.2 million. It had total available liquidity of $406.3 million. The company’s balance sheet is free of debt load, which highlights a sound financial position.
Guidance
The leading manufacturer of highly engineered drilling and production equipment expects increasing activities from its independent exploration and production customers in the December quarter and the first half of next year, thanks to recovering commodity prices.
Zacks Rank & Stocks to Consider
The company carries a Zacks Rank #4 (Sell). A few better-ranked stocks from the energy space include Whiting Petroleum Corporation , Comstock Resources, Inc. (CRK - Free Report) and APA Corporation (APA - Free Report) . While Comstock carries a Zacks Rank #2 (Buy), while Whiting Petroleum and APA Corporation sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days.
Comstock is expected to witness earnings growth of 378.3% in 2021.
APA Corporation has seen upward earnings estimate revisions for 2021 in the past 30 days.