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RPC (RES) Earnings and Revenues Fall Shy of Estimates in Q3
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RPC, Inc (RES - Free Report) reported third-quarter 2018 earnings of 19 cents per share, which lagged the Zacks Consensus Estimate of 23 cents. The bottom line also declined from the year-ago quarter’s tally of 28 cents.
Total revenues of $440 million missed the Zacks Consensus Estimate of $456 million. Nevertheless, the top line improved from the year-ago quarter’s figure of $471 million.
Expenses during the quarter increased, thanks to rise in employment. This was partially offset by the decline in supplies and materials costs.
Segmental Performance
Per the company, average domestic rig count in the reported quarter increased 11.1% year over year to 1,051, which aided the Technical Services and Support Services segments to improve from the year-ago quarter’s tallies. In other words, higher count of rigs following recovery in oil prices primarily led to the moderate improvement in oilfield activities like drilling and completion works. However, bottleneck issues in the Permian Basin offset the degree of improvement. Due to the transportation capacity constraint in the Permian Basin, the company prepared itself to reposition its equipment to other basins, if required.
Technical Services: Operating profit in the segment came in at $56.2 million, lower than the year-ago quarter’s level of $104.3 million. The decline was mainly caused by lower activity levels in several of the larger service lines along with lower pricing in the pressure pumping service line.
Support Services: Operating profit in the segment came in at $1.8 million, against the year-ago quarter’s loss of $2.1 million. The improvement came on the back of enhanced activity levels and pricing in the rental tool service line. Rental tool service line, being the largest service line in the segment, has considerable weightage.
Cost and Expenses
Cost of revenues surged from $294.8 million in the third quarter of 2017 to $301 million due to increased expenses related to the rise in employment. This was partially offset by lower supplies and materials costs. Cost of revenues, as a percentage of sales, came in at 68.4% compared with 62.6% in the year-ago quarter.
Balance Sheet
As of Sep 30, 2018, the company had cash and cash equivalents of $128.4 million and no long-term debt.
Zacks Rank & Key Picks
Currently, Atlanta, GA-based RPC has a Zacks Rank #3 (Hold).
El Dorado, AR-based Murphy Oil C is a global oil and gas exploration as well as production company. It pulled off an average positive earnings surprise of 96.5% in the last four quarters.
Headquartered in Calgary, Alberta, Enbridge is a leading energy infrastructure company. The company delivered an average positive earnings surprise of 35.3% in the trailing four quarters.
Based in Rome, Italy, Eni is among the leading integrated energy players in the world. The partnership delivered a negative earnings surprise of 0.3% in the last four quarters.
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RPC (RES) Earnings and Revenues Fall Shy of Estimates in Q3
RPC, Inc (RES - Free Report) reported third-quarter 2018 earnings of 19 cents per share, which lagged the Zacks Consensus Estimate of 23 cents. The bottom line also declined from the year-ago quarter’s tally of 28 cents.
RPC, Inc. Price, Consensus and EPS Surprise
RPC, Inc. Price, Consensus and EPS Surprise | RPC, Inc. Quote
Total revenues of $440 million missed the Zacks Consensus Estimate of $456 million. Nevertheless, the top line improved from the year-ago quarter’s figure of $471 million.
Expenses during the quarter increased, thanks to rise in employment. This was partially offset by the decline in supplies and materials costs.
Segmental Performance
Per the company, average domestic rig count in the reported quarter increased 11.1% year over year to 1,051, which aided the Technical Services and Support Services segments to improve from the year-ago quarter’s tallies. In other words, higher count of rigs following recovery in oil prices primarily led to the moderate improvement in oilfield activities like drilling and completion works. However, bottleneck issues in the Permian Basin offset the degree of improvement. Due to the transportation capacity constraint in the Permian Basin, the company prepared itself to reposition its equipment to other basins, if required.
Technical Services: Operating profit in the segment came in at $56.2 million, lower than the year-ago quarter’s level of $104.3 million. The decline was mainly caused by lower activity levels in several of the larger service lines along with lower pricing in the pressure pumping service line.
Support Services: Operating profit in the segment came in at $1.8 million, against the year-ago quarter’s loss of $2.1 million. The improvement came on the back of enhanced activity levels and pricing in the rental tool service line. Rental tool service line, being the largest service line in the segment, has considerable weightage.
Cost and Expenses
Cost of revenues surged from $294.8 million in the third quarter of 2017 to $301 million due to increased expenses related to the rise in employment. This was partially offset by lower supplies and materials costs. Cost of revenues, as a percentage of sales, came in at 68.4% compared with 62.6% in the year-ago quarter.
Balance Sheet
As of Sep 30, 2018, the company had cash and cash equivalents of $128.4 million and no long-term debt.
Zacks Rank & Key Picks
Currently, Atlanta, GA-based RPC has a Zacks Rank #3 (Hold).
A few better-ranked players in the same sector are Murphy Oil Corporation (MUR - Free Report) , Enbridge Inc (ENB - Free Report) and Eni SpA (E - Free Report) . All these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
El Dorado, AR-based Murphy Oil C is a global oil and gas exploration as well as production company. It pulled off an average positive earnings surprise of 96.5% in the last four quarters.
Headquartered in Calgary, Alberta, Enbridge is a leading energy infrastructure company. The company delivered an average positive earnings surprise of 35.3% in the trailing four quarters.
Based in Rome, Italy, Eni is among the leading integrated energy players in the world. The partnership delivered a negative earnings surprise of 0.3% in the last four quarters.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>