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Dril-Quip, Inc. (DRQ - Free Report) recently reported second-quarter 2019 adjusted earnings of 3 cents per share, which surpassed the Zacks Consensus Estimate of a penny. The company incurred a loss of 24 cents in the year-ago quarter.
Total revenues came in at $104 million in the quarter compared with $95 million in the year-ago quarter. The top line also exceeded the Zacks Consensus Estimate of $97 million.
The strong results were supported by relative stabilization of commodity prices that led to higher customer activities and strong cost-saving initiatives.
Operating income of $2.1 million significantly improved from the loss of $3.8 million incurred in the prior-year quarter due to increased customer activities and cost-saving initiatives.
On the cost front, selling, general and administrative expenses marginally fell to around $23 million from the year-ago quarter. Similarly, Engineering and product development costs declined marginally year over year to $5.2 million. Total cost and expenses during the second quarter totaled $101.7 million compared with $98.6 million in the year-ago quarter. The increase was primarily driven by impairment, restructuring and other charges.
Notably, the company achieved an additional $5 million of annualized costs savings during the reported quarter, which brought the total annualized savings to around $29 million since fourth-quarter 2018.
Share Buyback
In the second quarter, the company repurchased 22,073 shares under its program (created on Feb 26, 2019) at an average price of around $39.87 per share. This totaled to about $1 million in buybacks.
Backlog
At the end of second-quarter 2019, the company had $322 million in backlog, up from $304 million as of Mar 31, 2019.
Free Cash flow
Dril-Quip’s free cash flow in the April-to-June period was $8.7 million, higher than $3 million in the year-ago level.
Balance Sheet
As of Jun 30, 2019, cash balances rose to $423.1 million. Also, the balance sheet of the company is free from debt load, which indicates a sound financial position. In fact, Dril-Quip expects no headwinds to dent long-term growth plan.
Outlook
For the second half of 2019, the company expects revenues to be in the range of $100-$110 million in every quarter. Additionally, it anticipates quarterly product bookings to be in the range of $75- 95million during the same period.
Dril-Quip also expects an increasing trend for deep-water activities. For the 2018-2021 time frame, it projects a compound annual growth rate of 8% in deep-water activities in the Asia Pacific, East Hemisphere and West Hemisphere regions.
Zacks Rank and Stocks to Consider
Currently, Dril-Quip has a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy sector are given below:
MPLX LP (MPLX - Free Report) provides midstream infrastructures to the upstream companies. For 2019, its bottom line is expected to improve 23.6% from the figure registered a year ago. The company has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
World Fuel Services Corporation engages in the distribution of fuel and related products for different industries worldwide. Its bottom line in 2019 is expected to improve 10.9% from a year ago. The company has a Zacks Rank #1.
Delek US Holdings, Inc. (DK - Free Report) engages in integrated downstream energy businesses. The company’s earnings beat the consensus mark in three of the trailing four quarters, with an average positive surprise of 59.2%.The company has a Zacks Rank #2 (Buy).
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Dril-Quip (DRQ) Q2 Earnings Beat Estimates, Backlog Surges
Dril-Quip, Inc. (DRQ - Free Report) recently reported second-quarter 2019 adjusted earnings of 3 cents per share, which surpassed the Zacks Consensus Estimate of a penny. The company incurred a loss of 24 cents in the year-ago quarter.
Total revenues came in at $104 million in the quarter compared with $95 million in the year-ago quarter. The top line also exceeded the Zacks Consensus Estimate of $97 million.
The strong results were supported by relative stabilization of commodity prices that led to higher customer activities and strong cost-saving initiatives.
Dril-Quip, Inc. Price, Consensus and EPS Surprise
Dril-Quip, Inc. price-consensus-eps-surprise-chart | Dril-Quip, Inc. Quote
Operational Results
Operating income of $2.1 million significantly improved from the loss of $3.8 million incurred in the prior-year quarter due to increased customer activities and cost-saving initiatives.
On the cost front, selling, general and administrative expenses marginally fell to around $23 million from the year-ago quarter. Similarly, Engineering and product development costs declined marginally year over year to $5.2 million. Total cost and expenses during the second quarter totaled $101.7 million compared with $98.6 million in the year-ago quarter. The increase was primarily driven by impairment, restructuring and other charges.
Notably, the company achieved an additional $5 million of annualized costs savings during the reported quarter, which brought the total annualized savings to around $29 million since fourth-quarter 2018.
Share Buyback
In the second quarter, the company repurchased 22,073 shares under its program (created on Feb 26, 2019) at an average price of around $39.87 per share. This totaled to about $1 million in buybacks.
Backlog
At the end of second-quarter 2019, the company had $322 million in backlog, up from $304 million as of Mar 31, 2019.
Free Cash flow
Dril-Quip’s free cash flow in the April-to-June period was $8.7 million, higher than $3 million in the year-ago level.
Balance Sheet
As of Jun 30, 2019, cash balances rose to $423.1 million. Also, the balance sheet of the company is free from debt load, which indicates a sound financial position. In fact, Dril-Quip expects no headwinds to dent long-term growth plan.
Outlook
For the second half of 2019, the company expects revenues to be in the range of $100-$110 million in every quarter. Additionally, it anticipates quarterly product bookings to be in the range of $75- 95million during the same period.
Dril-Quip also expects an increasing trend for deep-water activities. For the 2018-2021 time frame, it projects a compound annual growth rate of 8% in deep-water activities in the Asia Pacific, East Hemisphere and West Hemisphere regions.
Zacks Rank and Stocks to Consider
Currently, Dril-Quip has a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy sector are given below:
MPLX LP (MPLX - Free Report) provides midstream infrastructures to the upstream companies. For 2019, its bottom line is expected to improve 23.6% from the figure registered a year ago. The company has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
World Fuel Services Corporation engages in the distribution of fuel and related products for different industries worldwide. Its bottom line in 2019 is expected to improve 10.9% from a year ago. The company has a Zacks Rank #1.
Delek US Holdings, Inc. (DK - Free Report) engages in integrated downstream energy businesses. The company’s earnings beat the consensus mark in three of the trailing four quarters, with an average positive surprise of 59.2%. The company has a Zacks Rank #2 (Buy).
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>