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Cactus (WHD) Q4 Earnings Beat on Spoolable Technologies
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Cactus, Inc. (WHD - Free Report) reported fourth-quarter 2023 adjusted earnings of 81 cents per share, which beat the Zacks Consensus Estimate of 68 cents. The bottom line also rose from the year-ago quarter’s level of 57 cents.
Total quarterly revenues of $275 million beat the Zacks Consensus Estimate of $267 million. The top line also improved from the year-ago quarter’s figure of $188 million.
The strong quarterly results can be attributed to contributions from the Spoolable Technologies segment.
Post-closure of the FlexSteel acquisition, Cactus reported under two business segments — Pressure Control and Spoolable Technologies.
WHD generated revenues of $180.5 million from the Pressure Control segment, down from $187.8 million reported in the year-ago quarter. The segment was adversely impacted by a decline in the sales of wellhead and production related equipment, due to lower customer activity. The top line beat our estimate of $178.1 million.
Adjusted Segment EBITDA for Pressure Control totaled $64.7 million, down from almost $70 million in the prior-year quarter. The reported figure surpassed our estimate of $56.2 million.
Revenues from the Spoolable Technologies segment came in at $94.4 million, which beat our estimate of $93.5 million.
Adjusted Segment EBITDA for the unit came in at $39.2 million, exceeding our estimate of $36 million.
Capex and Cash Flow
Cactus’ capital expenditure and other amount for 2023 totaled $44 million. Operating cash flow for the fourth quarter came in at $91.7 million.
Balance Sheet
Cactus had cash and cash equivalents of $133.8 million at the end of the fourth quarter of 2023. The company had no bank debt outstanding as of Dec 31, 2023.
Outlook
In the first quarter of 2024, Cactus expects U.S. land activity levels to remain relatively stable on a sequential basis. Even though the current industry outlook for 2024 U.S. land drilling and completion activity seems to be modest, the company has undertaken several initiatives to further enhance margins and focus on diversifying international revenue streams through growth in both the business segments. Cactus expects net capital expenditures to be in the range of $45-$55 million for full-year 2024.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. With a pipeline network extending more than 125,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
Repsol is a global multi-energy company, involved in exploration and production activities as well as refining and marketing petroleum products. The company is also actively involved in transitioning toward cleaner and more sustainable energy solutions. Recently, it announced the expansion of its network of renewable fuel refilling stations in Europe, demonstrating its commitment to a sustainable energy model.
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Cactus (WHD) Q4 Earnings Beat on Spoolable Technologies
Cactus, Inc. (WHD - Free Report) reported fourth-quarter 2023 adjusted earnings of 81 cents per share, which beat the Zacks Consensus Estimate of 68 cents. The bottom line also rose from the year-ago quarter’s level of 57 cents.
Total quarterly revenues of $275 million beat the Zacks Consensus Estimate of $267 million. The top line also improved from the year-ago quarter’s figure of $188 million.
The strong quarterly results can be attributed to contributions from the Spoolable Technologies segment.
Cactus, Inc. Price, Consensus and EPS Surprise
Cactus, Inc. price-consensus-eps-surprise-chart | Cactus, Inc. Quote
Business Segments
Post-closure of the FlexSteel acquisition, Cactus reported under two business segments — Pressure Control and Spoolable Technologies.
WHD generated revenues of $180.5 million from the Pressure Control segment, down from $187.8 million reported in the year-ago quarter. The segment was adversely impacted by a decline in the sales of wellhead and production related equipment, due to lower customer activity. The top line beat our estimate of $178.1 million.
Adjusted Segment EBITDA for Pressure Control totaled $64.7 million, down from almost $70 million in the prior-year quarter. The reported figure surpassed our estimate of $56.2 million.
Revenues from the Spoolable Technologies segment came in at $94.4 million, which beat our estimate of $93.5 million.
Adjusted Segment EBITDA for the unit came in at $39.2 million, exceeding our estimate of $36 million.
Capex and Cash Flow
Cactus’ capital expenditure and other amount for 2023 totaled $44 million. Operating cash flow for the fourth quarter came in at $91.7 million.
Balance Sheet
Cactus had cash and cash equivalents of $133.8 million at the end of the fourth quarter of 2023. The company had no bank debt outstanding as of Dec 31, 2023.
Outlook
In the first quarter of 2024, Cactus expects U.S. land activity levels to remain relatively stable on a sequential basis. Even though the current industry outlook for 2024 U.S. land drilling and completion activity seems to be modest, the company has undertaken several initiatives to further enhance margins and focus on diversifying international revenue streams through growth in both the business segments. Cactus expects net capital expenditures to be in the range of $45-$55 million for full-year 2024.
Zacks Rank and Key Picks
Currently, WHD carries a Zacks Rank #4 (Sell).
Investors might want to look at some better-ranked stocks in the energy sector, such as Energy Transfer LP (ET - Free Report) , Archrock Inc. (AROC - Free Report) and Repsol (REPYY - Free Report) . While both Energy Transfer and ArchRock presently sport a Zacks Rank #1 (Strong Buy), Repsol carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. With a pipeline network extending more than 125,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
Repsol is a global multi-energy company, involved in exploration and production activities as well as refining and marketing petroleum products. The company is also actively involved in transitioning toward cleaner and more sustainable energy solutions. Recently, it announced the expansion of its network of renewable fuel refilling stations in Europe, demonstrating its commitment to a sustainable energy model.