Fundamentals weakened in Q2; acquires cementing business: Quarter-over-quarter, RPC’s (RES) revenues decreased by 13% in Q2. Job delays, lower demand for pressure-pumping jobs, and weaker activity in the natural gas-heavy basins contributed to the deteriorated performance in Q2. To address its growth and margin concerns, RES has taken the inorganic route following its Spinnaker Oilwell Services acquisition, which would expand its cementing business beyond South Texas. It has also undertaken cost-reduction measures to realign with lower activity levels.
Net income continues to dip in Q2: RES’s net income declined by 9% in Q2 2023 compared to a quarter ago. Its adjusted EBITDA margin decreased incrementally by 140 basis points. Read more about the company in our previous article here.
RES’s clean balance sheet: RES maintained a debt-free balance sheet as of June 30. This, along with a cash balance of $180 million (including advance payment for business purchases), would allow for share buybacks and continue with dividend payments ($0.04 per share).
Thanks for reading the RES take three, designed to give you three critical takeaways from RES’s earnings report. Soon we will present a second update on RES earnings highlighting its current strategy, news, and notes we extracted from our deeper dive.
