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In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 8.9% but revenues missed the same by 5.3%. On a year-over-year basis, its earnings rose 75%, but revenues decreased by 1%. Shipment delays in Latin America due to customer logistics, Canadian wildfires and extended production platform turnarounds in the Gulf of Mexico offset strong revenue growth in the Middle East, Africa and Europe.
This engineering services company’s earnings topped the consensus mark in six of the trailing seven quarters and met on one occasion.
Trend in Estimates
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has remained stable at 49 cents in the past 60 days. The estimated figure indicates a 48.5% increase from 33 cents per share reported in the year-ago quarter.
The consensus mark for revenues is pegged at $968.03 million, suggesting a 5.2% decline from the year-ago quarter’s reported figure.
Factors to Note
ChampionX’s earnings are likely to improve in the third quarter of 2023 despite lower revenues. It is expected to benefit from its production-oriented business portfolio, cost-saving strategies and digital innovations.
The company witnessed strong demand in the international markets in July. It anticipates continued positive momentum in North American production-oriented businesses. CHX witnessed a good volume pick-up in July, backed by improvements in the factors that impacted the second quarter volumes.
Continued adoption of its fit-for-purpose digital solutions, including emissions management technologies that drive tangible productivity for its customers, will contribute to revenues.
CHX anticipates consolidated revenues in the range of $960-$990 million for the quarter-to-be-reported versus $1,022 million reported a year ago. Adjusted EBITDA is expected in the range of $199-$207 million, a significant increase from the previous year’s $166 million. The company is focused on driving margin expansion and expects the adjusted EBITDA to grow in the rest of 2023.
Segment-wise, the Zacks Consensus Estimate for Production Chemical Technologies (accounted for 62% of total revenues in second-quarter 2023) is currently pegged at $622 million, suggesting a 6.4% year-over-year decline. This is due to the absence of CT Russia Business, shipment delays and customer maintenance turnarounds in the Gulf of Mexico and the Canadian wildfires.
The same for Production & Automation Technologies (27.4%) segment revenues are currently pinned at $259 million, up 4.4% from the previous year, backed by improved demand in the U.S. and international business.
The Zacks Consensus Estimate for Drilling Technologies (6.2%) is pegged at $56 million, down from $61 million reported a year ago. Reservoir Chemical Technologies (2.6%) segment revenue is pegged at $24.23 million compared with $35.49 million reported in the prior year, owing to lower volumes.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for ChampionX this time around. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #3.
Stocks With the Favorable Combination
Here are some companies in the Zacks Construction sector that, according to our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.
KBR’s earnings topped the consensus mark in all the last four quarters, the average being 10.8%. Earnings for the to-be-reported quarter are expected to increase 12.3% year over year.
Construction Partners, Inc. (ROAD - Free Report) has an Earnings ESP of +2.91% and a Zacks Rank #1.
ROAD’s earnings topped the consensus mark in three of the last four quarters, the average being 10.6%. Earnings for the to-be-reported quarter are expected to rise 108% year over year.
Dycom Industries, Inc. (DY - Free Report) has an Earnings ESP of +1.24% and a Zacks Rank #2.
DY’s earnings topped the consensus mark in all the last four quarters, the average being 147.4%. Earnings for the to-be-reported quarter are expected to grow 4.7% year over year.
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ChampionX (CHX) Gears Up for Q3 Earnings: What to Expect
ChampionX Corporation (CHX - Free Report) is slated to report third-quarter 2023 results on Oct 24, after market close.
In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 8.9% but revenues missed the same by 5.3%. On a year-over-year basis, its earnings rose 75%, but revenues decreased by 1%. Shipment delays in Latin America due to customer logistics, Canadian wildfires and extended production platform turnarounds in the Gulf of Mexico offset strong revenue growth in the Middle East, Africa and Europe.
This engineering services company’s earnings topped the consensus mark in six of the trailing seven quarters and met on one occasion.
Trend in Estimates
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has remained stable at 49 cents in the past 60 days. The estimated figure indicates a 48.5% increase from 33 cents per share reported in the year-ago quarter.
ChampionX Corporation Price and EPS Surprise
ChampionX Corporation price-eps-surprise | ChampionX Corporation Quote
The consensus mark for revenues is pegged at $968.03 million, suggesting a 5.2% decline from the year-ago quarter’s reported figure.
Factors to Note
ChampionX’s earnings are likely to improve in the third quarter of 2023 despite lower revenues. It is expected to benefit from its production-oriented business portfolio, cost-saving strategies and digital innovations.
The company witnessed strong demand in the international markets in July. It anticipates continued positive momentum in North American production-oriented businesses. CHX witnessed a good volume pick-up in July, backed by improvements in the factors that impacted the second quarter volumes.
Continued adoption of its fit-for-purpose digital solutions, including emissions management technologies that drive tangible productivity for its customers, will contribute to revenues.
CHX anticipates consolidated revenues in the range of $960-$990 million for the quarter-to-be-reported versus $1,022 million reported a year ago. Adjusted EBITDA is expected in the range of $199-$207 million, a significant increase from the previous year’s $166 million. The company is focused on driving margin expansion and expects the adjusted EBITDA to grow in the rest of 2023.
Segment-wise, the Zacks Consensus Estimate for Production Chemical Technologies (accounted for 62% of total revenues in second-quarter 2023) is currently pegged at $622 million, suggesting a 6.4% year-over-year decline. This is due to the absence of CT Russia Business, shipment delays and customer maintenance turnarounds in the Gulf of Mexico and the Canadian wildfires.
The same for Production & Automation Technologies (27.4%) segment revenues are currently pinned at $259 million, up 4.4% from the previous year, backed by improved demand in the U.S. and international business.
The Zacks Consensus Estimate for Drilling Technologies (6.2%) is pegged at $56 million, down from $61 million reported a year ago. Reservoir Chemical Technologies (2.6%) segment revenue is pegged at $24.23 million compared with $35.49 million reported in the prior year, owing to lower volumes.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for ChampionX this time around. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #3.
Stocks With the Favorable Combination
Here are some companies in the Zacks Construction sector that, according to our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.
KBR, Inc. (KBR - Free Report) has an Earnings ESP of +6.36% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
KBR’s earnings topped the consensus mark in all the last four quarters, the average being 10.8%. Earnings for the to-be-reported quarter are expected to increase 12.3% year over year.
Construction Partners, Inc. (ROAD - Free Report) has an Earnings ESP of +2.91% and a Zacks Rank #1.
ROAD’s earnings topped the consensus mark in three of the last four quarters, the average being 10.6%. Earnings for the to-be-reported quarter are expected to rise 108% year over year.
Dycom Industries, Inc. (DY - Free Report) has an Earnings ESP of +1.24% and a Zacks Rank #2.
DY’s earnings topped the consensus mark in all the last four quarters, the average being 147.4%. Earnings for the to-be-reported quarter are expected to grow 4.7% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.