It has been about a month since the last earnings report for Archrock Inc. (AROC Quick QuoteAROC - Free Report) . Shares have lost about 4.8% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Archrock Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Archrock Misses Q2 Earnings & Revenue Estimates on AMS Weakness

Archrock reported second-quarter 2026 adjusted earnings of 38 cents per share, down 2.6% from 39 cents per share a year earlier. The bottom line missed the Zacks Consensus Estimate of 46 cents by 17.4%.

Revenues of $371.2 million declined 3.1% from $383.2 million a year ago. The top line missed the consensus mark of $390.4 million by 4.9%.

The weak quarterly results were primarily due to softness in aftermarket services (AMS), which offset solid contract operations performance.

Period-end horsepower utilization remained high at 94.4%, while contract operations adjusted gross margin percentage improved from the year-ago period.

AROC's Contract Operations Remain Resilient

Contract operations revenues rose 3.4% to $329.3 million from $318.3 million. The increase reflected higher rates, an additional month of contribution from the NGCS acquisition and revenues from horsepower additions, partly offset by active horsepower sales used to high-grade the fleet.

Contract operations adjusted gross margin increased 5.6% to $234.6 million, while the adjusted gross margin percentage rose to 71% from 70%. Total operating horsepower ended the quarter at 4.5 million compared with 4.7 million a year earlier, with the decline largely driven by the sale of approximately 165,000 non-strategic operating horsepower.

Archrock's Aftermarket Services Lose Momentum

Aftermarket services revenues fell 35.2% to $42 million from $64.8 million in the second quarter of 2025. The decline was due to lower parts sales, the absence of non-recurring overhauled-engine sales that benefited the prior-year quarter and reduced demand for major maintenance activity.

The adjusted gross margin for the segment declined 33.6% to $9.9 million from $14.9 million. However, the adjusted gross margin percentage improved to 24% from 23%, reflecting disciplined execution and a focus on higher-quality, higher-margin work.

AROC's Margin Gains Offset Some Cost Pressure

Total adjusted gross margin increased to $244.5 million from $237.1 million a year ago. The adjusted gross margin percentage expanded to 66% from 62%, helped by the stronger profitability of contract operations and the improved margin rate in aftermarket services.

Selling, general and administrative expenses rose 9.4% to $39.6 million from $36.2 million. Higher long-term incentive compensation, primarily driven by the stock price increase, was a key factor. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) remained flat at $212.6 million compared with $212.7 million in the prior-year quarter.

Archrock Generates Solid Cash Flow

Net cash provided by operating activities was $160.8 million in the quarter. The adjusted free cash flow totaled $67 million, while adjusted free cash flow after dividends was $28.4 million. The total capital expenditure was $98 million.

AROC Raises Dividend

The board raised the quarterly dividend by around 10% to 23 cents per share from 21 cents a year earlier. Dividend coverage was 3.1X, supporting the company's continued emphasis on shareholder returns alongside growth investment.

Archrock Maintains Balance Sheet Flexibility

As of June 30, 2026, AROC’s long-term debt was $2.35 billion, while the leverage ratio improved to 2.6X from 3.3X a year ago. Available liquidity totaled $631 million at the quarter-end.

During the quarter, Archrock redeemed $800 million of 6.25% senior notes due 2028 using borrowings under its revolving credit facility. The company ended June with $113.2 million in remaining share repurchase authorization and did not repurchase shares during the quarter.

AROC Tightens 2026 EBITDA Guidance

Archrock tightened its 2026 adjusted EBITDA guidance to $865-$885 million from $865-$915 million. The revision reflects higher contract compression make-ready costs, anticipated second-half lube oil cost pressure, softer aftermarket services demand and higher selling, general and administrative costs tied to long-term incentive compensation.

The company maintained 2026 growth capital spending guidance of $250-$275 million and expects the total capital expenditure to be between $400 million and $445 million. Archrock introduced cumulative growth capital guidance of $1.4 to $1.6 billion for 2027 to 2030, aimed at adding 1 million horsepower to meet expected demand. The company signed an eight-year agreement with a strategic customer covering approximately 665,000 horsepower, with a two-year extension option.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -9.93% due to these changes.

VGM Scores

At this time, Archrock Inc. has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a score of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Archrock Inc. has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Archrock Inc. is part of the Zacks Oil and Gas - Field Services industry. Over the past month, FMC Technologies (FTI Quick QuoteFTI - Free Report) , a stock from the same industry, has gained 15%. The company reported its results for the quarter ended June 2026 more than a month ago.

FMC Technologies reported revenues of $2.76 billion in the last reported quarter, representing a year-over-year change of +9%. EPS of $0.91 for the same period compares with $0.68 a year ago.

For the current quarter, FMC Technologies is expected to post earnings of $0.89 per share, indicating a change of +18.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +4.3% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for FMC Technologies. Also, the stock has a VGM Score of A.