Yahoo Finance RPC (RES) Down 1.5% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for RPC (RES). Shares have lost about 1.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is RPC 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 drivers.
RPC’s Earnings and Revenues Miss Estimates in Q1
RPC posted first-quarter adjusted earnings of 39 cents per share, missing the Zacks Consensus Estimate of 41 cents. However, the bottom line significantly increased from the year-ago quarter’s 7 cents.
Total quarterly revenues of $476.7 million missed the Zacks Consensus Estimate of $495 million. The top line significantly improved from the year-ago figure of $284.6 million.
Lower-than-expected quarterly earnings resulted from higher cost of revenues, as well as selling, general and administrative expenses. The negatives were partially offset by rising activity levels in all service lines.
Segmental Performance
Operating profit in the Technical Services segment totaled $103.5 million, higher than the year-ago quarter’s profit of $21.8 million. The upside was caused by increased customer activities, along with higher pricing and a larger active fleet of revenue-producing equipment.
Operating profit in the Support Services segment was $6.6 million, higher than the year-ago quarter’s profit of $2.8 million. The improvement was due to increased activities and improved pricing.
Total operating profit in the quarter was $90.7 million, skyrocketing from $23 million. The average domestic rig count was 760, reflecting a 19.5% increase from the year-ago level. The average oil price in the quarter was $75.97 per barrel. The same for natural gas was $2.66 per thousand cubic feet.
Costs and Expenses
In first-quarter 2023, the cost of revenues increased from $208.8 million to $305.3 million. Selling, general and administrative expenses increased to $42.2 million from the year-ago figure of $36.2 million.
Financials
RPC’s total capital expenditure for the March-end quarter of 2023 amounted to $65.3 million.
As of Mar 31, RPC had cash and cash equivalents of $177.9 million, up sequentially from $126.4 million. Nonetheless, the company managed to maintain a debt-free balance sheet.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, RPC has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. 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
RPC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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RPC, Inc. (RES) : Free Stock Analysis Report
