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RPC (RES) Q4 Loss Narrower Than Estimates, Revenues Miss

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RPC Inc’s (RES - Free Report) fourth-quarter 2019 loss of 7 cents was narrower than the Zacks Consensus Estimate of a loss of 10 cents on successful cost-containment efforts.

However, the bottom line compared unfavorably against the year-ago quarter’s earnings of 6 cents per share. The weakness can primarily be attributed to lower activity levels and pricing along with a smaller-fleet of pressure pumping equipment.

Total revenues of $236 million missed the Zacks Consensus Estimate of $242 million. Moreover, the top line declined from the year-ago quarter’s figure of $377 million.

RPC, Inc. Price, Consensus and EPS Surprise

 

Segmental Performance

Operating loss in the Technical Services segment totaled $17.1 million against the year-ago quarter’s profit of $19.8 million. The underperformance was mainly caused by lower pricing and activity levels.

Operating profit in the Support Services segment came in at $1.2 million, down from $2.5 million in the year-ago quarter. Seasonal weakness in most of the service lines hurt this segment.

Cost and Expenses

Cost of revenues contracted from $274.4 million in fourth-quarter 2018 to $176.8 million due to lower activity levels and cost-reduction actions.

Financials

RPC’s total capital expenditure in the December quarter of 2019 amounted to $41.4 million. As of Dec 31, the company had cash and cash equivalents of $50 million and no long-term debt.

Outlook

The slowdown in drilling activities in U.S. resources and persistent weakness in crude prices have hurt demand for oilfield services. Although the company has witnessed slight improvement in January and is finishing the month on a strong note, it is uncertain of how things will turn out in the near term.

Zacks Rank & Stocks to Consider

RPC currently carries a Zacks Rank #3 (Hold). Meanwhile, few better-ranked players in the energy space are Murphy Oil Corporation MUR, California Resources Corporation CRC and Suncor Energy SU. All the stocks sport a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Murphy Oil Corporation has trailing four-quarter positive earnings surprise of 37.4%, on average.

California Resources Corporation has trailing four-quarter positive earnings surprise of 711.1%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.

Suncor Energy has trailing four-quarter positive earnings surprise of 2.2%, on average. The company’s earnings beat the consensus mark in two of the last four quarters.

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