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AROC contract operations revenues increased 10% y/y, supported by higher horsepower and pricing.
Archrock reaffirmed its 2026 EBITDA guidance in the range of $865-$915M amid strong compression demand.
Archrock Inc. (AROC - Free Report) reported first-quarter 2026 adjusted earnings of 42 cents per share, which missed the Zacks Consensus Estimate of 47 cents by 10.6%. The bottom line remained flat year over year.
The Houston, TX-based oil and gas equipment and services company generated total quarterly revenues of $373.8 million, up 7.7% year over year from $347.2 million reported in the year-ago quarter, reflecting higher contract operations activity and increased pricing. The figure missed the Zacks Consensus Estimate of $376.7 million by 0.8%.
The lower-than-expected quarterly results were driven by higher selling, general and administrative (SG&A) costs and a non-cash impairment charge.
AROC’s Contract Operations Continued to Drive Growth
Contract operations remained the primary growth engine. Segment revenues increased 10% year over year to $330.9 million from $300.4 million in the year-ago quarter, supported by higher operating horsepower and pricing. Average operating horsepower at the quarter-end was 4.5 million compared with 4.3 million a year ago, while utilization is at 95% compared with the year-ago period’s figure of 96%, underscoring the durability of demand for its compression services.
Profitability in the segment also improved on a year-ago basis. Contract operations adjusted gross margin increased 13% to $237.6 million from $210.6 million recorded in the prior-year period. Contract operations adjusted gross margin percentage expanded to 72% from 70% in the year-ago period, reflecting operating execution and pricing carryover.
Archrock’s Aftermarket Services Softened on Seasonality
Aftermarket services were weaker year over year. Segment revenues were $42.9 million, down from $46.8 million recorded in the first quarter of 2025, reflecting lower service activity and a seasonal slowdown.
Margins compressed modestly as well. Aftermarket services adjusted gross margin was $9.8 million compared with $11.5 million a year ago. The aftermarket services adjusted gross margin percentage declined to 23% from 25% in the year-ago quarter.
AROC’s Cost Structure Shifts Higher in the Quarter
The earnings miss reflected pressure from operating costs that came in above the level implied by consensus expectations. Selling, general and administrative expenses increased to $45.2 million from $37.2 million a year ago, a notable increase relative to revenue growth. The increase was driven by higher long-term incentive compensation expense tied to the stock price and $3.7 million acceleration of expense recognition under an executive retention agreement that is not expected to recur during the remaining quarters of 2026.
AROC also recorded a long-lived and other asset impairment charge of $5.3 million during the quarter, up from $1 million recorded in the year-ago period.
Archrock Benefits From Asset Sales & Strong Cash Metrics
Archrock’s quarter included a meaningful contribution from asset sales. Adjusted EBITDA totaled $221.0 million, up from $197.8 million in the first quarter of 2025, and included $10.1 million in net gains primarily related to the sale of compression and other assets, higher than the year-ago figure of $7.3 million.
Cash generation remained a key support point. Net cash provided by operating activities was $185.9 million, and adjusted free cash flow was $91.9 million. The company returned $44.3 million to shareholders through dividends and share repurchases during the quarter, including a 22-cent per share dividend and approximately $4.4 million of buybacks.
AROC’s Capital Expenditure
Net capital expenditures of AROC totaled $92.2 million in the first quarter of 2026.
Archrock Maintains Leverage Discipline
AROC continued to reshape its balance sheet following recent financing actions. Long-term debt was $2.4 billion at March 31, 2026, and the company reported a leverage ratio of 2.6X, down from 3.2X a year earlier. The total available liquidity was $1.4 billion as of the same date.
AROC Reaffirms 2026 Outlook
Archrock reaffirmed full-year 2026 adjusted EBITDA guidance of $865 million to $915 million. Management emphasized that underlying business performance exceeded its basis for guidance, but higher SG&A was a partial offset in the quarter. On the investment side, the company expects growth capital expenditures between $250 million and $275 million to support newbuild horsepower and repackaging activity.
Chevron reported first-quarter 2026 adjusted earnings per share of $1.41, which beat the Zacks Consensus Estimate of 92 cents.
As of March 31, 2026, CVX reported $5.3 million in cash and cash equivalents. At the quarter's end, its total debt amounted to $45.4 billion.
BP reported first-quarter 2026 earnings of $1.24 per American Depositary Share, which beat the Zacks Consensus Estimate of 91 cents.
As of March 31, 2026, BP reported $35.7 million in cash and cash equivalents. At the quarter's end, its long-term debt totaled $25.3 billion.
Eni reported first-quarter 2026 adjusted earnings from continuing operations of 81 cents per American Depository Receipt, which missed the Zacks Consensus Estimate of $1.13.
As of March 31, 2026, E had a long-term debt of €21.7 billion and cash and cash equivalents of €8.3 billion.
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Archrock Q1 Earnings & Revenues Miss Estimates on Higher SG&A Expenses
Key Takeaways
Archrock Inc. (AROC - Free Report) reported first-quarter 2026 adjusted earnings of 42 cents per share, which missed the Zacks Consensus Estimate of 47 cents by 10.6%. The bottom line remained flat year over year.
The Houston, TX-based oil and gas equipment and services company generated total quarterly revenues of $373.8 million, up 7.7% year over year from $347.2 million reported in the year-ago quarter, reflecting higher contract operations activity and increased pricing. The figure missed the Zacks Consensus Estimate of $376.7 million by 0.8%.
The lower-than-expected quarterly results were driven by higher selling, general and administrative (SG&A) costs and a non-cash impairment charge.
Archrock, Inc. Price, Consensus and EPS Surprise
Archrock, Inc. price-consensus-eps-surprise-chart | Archrock, Inc. Quote
AROC’s Contract Operations Continued to Drive Growth
Contract operations remained the primary growth engine. Segment revenues increased 10% year over year to $330.9 million from $300.4 million in the year-ago quarter, supported by higher operating horsepower and pricing. Average operating horsepower at the quarter-end was 4.5 million compared with 4.3 million a year ago, while utilization is at 95% compared with the year-ago period’s figure of 96%, underscoring the durability of demand for its compression services.
Profitability in the segment also improved on a year-ago basis. Contract operations adjusted gross margin increased 13% to $237.6 million from $210.6 million recorded in the prior-year period. Contract operations adjusted gross margin percentage expanded to 72% from 70% in the year-ago period, reflecting operating execution and pricing carryover.
Archrock’s Aftermarket Services Softened on Seasonality
Aftermarket services were weaker year over year. Segment revenues were $42.9 million, down from $46.8 million recorded in the first quarter of 2025, reflecting lower service activity and a seasonal slowdown.
Margins compressed modestly as well. Aftermarket services adjusted gross margin was $9.8 million compared with $11.5 million a year ago. The aftermarket services adjusted gross margin percentage declined to 23% from 25% in the year-ago quarter.
AROC’s Cost Structure Shifts Higher in the Quarter
The earnings miss reflected pressure from operating costs that came in above the level implied by consensus expectations. Selling, general and administrative expenses increased to $45.2 million from $37.2 million a year ago, a notable increase relative to revenue growth. The increase was driven by higher long-term incentive compensation expense tied to the stock price and $3.7 million acceleration of expense recognition under an executive retention agreement that is not expected to recur during the remaining quarters of 2026.
AROC also recorded a long-lived and other asset impairment charge of $5.3 million during the quarter, up from $1 million recorded in the year-ago period.
Archrock Benefits From Asset Sales & Strong Cash Metrics
Archrock’s quarter included a meaningful contribution from asset sales. Adjusted EBITDA totaled $221.0 million, up from $197.8 million in the first quarter of 2025, and included $10.1 million in net gains primarily related to the sale of compression and other assets, higher than the year-ago figure of $7.3 million.
Cash generation remained a key support point. Net cash provided by operating activities was $185.9 million, and adjusted free cash flow was $91.9 million. The company returned $44.3 million to shareholders through dividends and share repurchases during the quarter, including a 22-cent per share dividend and approximately $4.4 million of buybacks.
AROC’s Capital Expenditure
Net capital expenditures of AROC totaled $92.2 million in the first quarter of 2026.
Archrock Maintains Leverage Discipline
AROC continued to reshape its balance sheet following recent financing actions. Long-term debt was $2.4 billion at March 31, 2026, and the company reported a leverage ratio of 2.6X, down from 3.2X a year earlier. The total available liquidity was $1.4 billion as of the same date.
AROC Reaffirms 2026 Outlook
Archrock reaffirmed full-year 2026 adjusted EBITDA guidance of $865 million to $915 million. Management emphasized that underlying business performance exceeded its basis for guidance, but higher SG&A was a partial offset in the quarter. On the investment side, the company expects growth capital expenditures between $250 million and $275 million to support newbuild horsepower and repackaging activity.
AROC’s Zacks Rank
AROC currently carries a Zacks Rank #4 (Sell).
Recent Energy Sector Releases
Some better-ranked stocks from the energy sector that have recently reported their earnings are Chevron Corporation (CVX - Free Report) , BP plc (BP - Free Report) and Eni S.p.A. (E - Free Report) . CVX and E each currently sport a Zacks Rank #1 (Strong Buy), while BP has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chevron reported first-quarter 2026 adjusted earnings per share of $1.41, which beat the Zacks Consensus Estimate of 92 cents.
As of March 31, 2026, CVX reported $5.3 million in cash and cash equivalents. At the quarter's end, its total debt amounted to $45.4 billion.
BP reported first-quarter 2026 earnings of $1.24 per American Depositary Share, which beat the Zacks Consensus Estimate of 91 cents.
As of March 31, 2026, BP reported $35.7 million in cash and cash equivalents. At the quarter's end, its long-term debt totaled $25.3 billion.
Eni reported first-quarter 2026 adjusted earnings from continuing operations of 81 cents per American Depository Receipt, which missed the Zacks Consensus Estimate of $1.13.
As of March 31, 2026, E had a long-term debt of €21.7 billion and cash and cash equivalents of €8.3 billion.