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Dril-Quip (DRQ) Up 0.6% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Dril-Quip (DRQ - Free Report) . Shares have added about 0.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Dril-Quip due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Dril-Quip Lags Q2 Earnings & Revenues Estimates

Dril-Quip reported a second-quarter 2023 adjusted loss of 3 cents per share against the Zacks Consensus Estimate of earnings of 4 cents. The bottom line improved from the year-ago quarter’s loss of 10 cents per share.

The company’s registered total quarterly revenues of $89.6 million, which declined from the year-ago quarter’s $94 million.

Lower Subsea Product and Subsea Services revenues led to lower-than-expected quarterly results. The negatives were partially offset by the improved performance of the key offshore markets and some reemerging areas.

Q2 Performance

Dril-Quip reported net bookings of $72.7 million for the quarter. At the second-quarter end, it had $252 million in the backlog.

The company reported a second-quarter operating income of $3.6 million, turning around from a loss of $3.9 million in the prior-year period.

Total Costs and Expenses

The cost of sales declined to $65.7 million in the reported quarter from $69.7 million in the year-ago period. However, engineering and product development costs increased to $3.2 million from the year-ago figure of $2.7 million. Selling, general and administrative costs increased to $23.2 million from $22.5 million a year ago.

Total costs and expenses in the quarter were $86 million compared with $97.8 million a year ago.

Free Cash Flow

In the second quarter, Dril-Quip generated a free cash flow of $1.1 million against a negative free cash flow of $10.6 million a year ago.

Financials

Dril-Quip recorded $10.2 million in capital expenditure for the quarter.

As of Jun 30, 2023, the company’s cash balance was $236.5 million. Its balance sheet is free of debt load, highlighting a sound financial position.

How Have Estimates Been Moving Since Then?

Estimates review followed an upward path over the past two months.


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