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RPC (RES) Up 18.8% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for RPC (RES - Free Report) . Shares have added about 18.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is RPC due for a pullback? 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 drivers.
RPC Beats Q1 Earnings & Revenues Estimates
RPC reported first-quarter 2020 loss of 4 cents, narrower than the Zacks Consensus Estimate of a loss of 6 cents on successful cost-containment efforts. However, the company reported break-even earnings in the year-ago quarter. The weakness can be primarily attributed to lower activity levels and pricing, along with a smaller fleet of pressure pumping equipment.
Total revenues of $243.8 million beat the Zacks Consensus Estimate of $229 million. However, the top line declined from the year-ago figure of $334.7 million.
Segmental Performance
Operating loss in the Technical Services segment totaled $12.2 million compared with the year-ago loss of $4.5 million. The underperformance was mainly caused by lower pricing and activity levels. A smaller fleet of equipment within pressure pumping also affected the segment.
Operating profit in the Support Services segment came in at $1.5 million, down from $3.1 million in the year-ago quarter.
Total operating loss in the quarter increased to $218.7 million from the year-ago level of $2.2 million. Average domestic rig count was 785 in the first quarter, indicating 24.7% fall from the year-ago level.
Cost and Expenses
Cost of revenues contracted from $252.4 million in first-quarter 2019 to $181.9 million due to lower materials and supplies expenses, as well as employment costs stemming from reduced activity levels. Moreover, selling, general and administrative expenses fell to $36.5 million in the quarter from the year-ago figure of $45.4 million due to a decline in employment expenses. However, the company incurred impairment and other charges of $205.5 million.
Financials
RPC’s total capital expenditure in the March quarter of 2020 amounted to $25 million. As of Mar 31, the company had cash and cash equivalents of $82.6 million, higher than the fourth-quarter level of $50 million, and no long-term debt.
Outlook
Slowdown in U.S. drilling activities and persistent weakness in crude prices have hurt demand for oilfield services. Although the company witnessed a slight improvement in the first quarter and ended the period on a strong note, it is uncertain of how things will turn out in the near term. It now expects 2020 capital expenditures to be $50 million, lower than the previous guidance of $80 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 10.33% due to these changes.
VGM Scores
At this time, RPC has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision has been net zero. It comes with little surprise RPC has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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RPC (RES) Up 18.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for RPC (RES - Free Report) . Shares have added about 18.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is RPC due for a pullback? 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 drivers.
RPC Beats Q1 Earnings & Revenues Estimates
RPC reported first-quarter 2020 loss of 4 cents, narrower than the Zacks Consensus Estimate of a loss of 6 cents on successful cost-containment efforts. However, the company reported break-even earnings in the year-ago quarter. The weakness can be primarily attributed to lower activity levels and pricing, along with a smaller fleet of pressure pumping equipment.
Total revenues of $243.8 million beat the Zacks Consensus Estimate of $229 million. However, the top line declined from the year-ago figure of $334.7 million.
Segmental Performance
Operating loss in the Technical Services segment totaled $12.2 million compared with the year-ago loss of $4.5 million. The underperformance was mainly caused by lower pricing and activity levels. A smaller fleet of equipment within pressure pumping also affected the segment.
Operating profit in the Support Services segment came in at $1.5 million, down from $3.1 million in the year-ago quarter.
Total operating loss in the quarter increased to $218.7 million from the year-ago level of $2.2 million. Average domestic rig count was 785 in the first quarter, indicating 24.7% fall from the year-ago level.
Cost and Expenses
Cost of revenues contracted from $252.4 million in first-quarter 2019 to $181.9 million due to lower materials and supplies expenses, as well as employment costs stemming from reduced activity levels. Moreover, selling, general and administrative expenses fell to $36.5 million in the quarter from the year-ago figure of $45.4 million due to a decline in employment expenses. However, the company incurred impairment and other charges of $205.5 million.
Financials
RPC’s total capital expenditure in the March quarter of 2020 amounted to $25 million. As of Mar 31, the company had cash and cash equivalents of $82.6 million, higher than the fourth-quarter level of $50 million, and no long-term debt.
Outlook
Slowdown in U.S. drilling activities and persistent weakness in crude prices have hurt demand for oilfield services. Although the company witnessed a slight improvement in the first quarter and ended the period on a strong note, it is uncertain of how things will turn out in the near term. It now expects 2020 capital expenditures to be $50 million, lower than the previous guidance of $80 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 10.33% due to these changes.
VGM Scores
At this time, RPC has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision has been net zero. It comes with little surprise RPC has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.