Dril-Quip Inc. ( DRQ Quick Quote DRQ - Free Report) shares have gained 2.1% despite reporting lower-than-expected first-quarter 2022 results on Apr 28. The manufacturer of highly engineered drilling and production equipment expects a continuous improvement in the business scenario in the near future. The company’s strong balance sheet, with ample liquidity, has been appreciated by investors.
Dril-Quip reported a first-quarter 2022 adjusted loss per share of 29 cents, wider than the Zacks Consensus Estimate of a loss of 21 cents. However, the bottom line improved from the year-ago loss of 47 cents per share.
The company registered total quarterly revenues of $83 million, missing the Zacks Consensus Estimate of $90 million. The top line increased from the year-ago quarter’s $81 million.
The lower-than-expected results can be attributed to the higher cost of sales. The negatives were partially offset by an increase in product revenues as a result of higher subsea product volumes.
DrilQuip, Inc. Price, Consensus and EPS Surprise
Dril-Quip reported product bookings of $66.5 million for the quarter. At the first quarter-end, it had $220.9 million in the backlog.
The company reported a first-quarter operating loss of $5.6 million, narrower than a loss of $31.6 million in the prior-year period.
Total Costs and Expenses
On the cost front, the cost of sales increased to $64 million for the reported quarter from $56.8 million in the year-ago period. However, engineering and product development costs contracted to $3.7 million for the quarter from the year-ago figure of $4 million. SG&A costs declined to $22.4 million from $29.6 million a year ago.
Total costs and expenses for the quarter were $88.7 million compared with $112.8 million a year ago.
Free Cash Flow
In the first quarter, Dril-Quip generated a negative free cash flow of $13 million against a cash flow of $10.6 million a year ago.
Dril-Quip recorded $2.1 million in capital expenditure for the quarter versus the year-ago level of $2.5 million.
As of Mar 31, 2022, its cash balance was $338 million. The company’s balance sheet is free of debt load, which highlights a sound financial position.
For 2022, Dril-Quip revised its expectation of product bookings upward to $60-$80 million from the prior projection of $40-$60 million.
The Zacks Rank #3 (Hold) company projects total capital expenditure of $15-$17 million for the year. You can see
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