Fundamentals Weakened In Q3; Changes Expected In Q4: Quarter-over-quarter, RPC’s (RES) revenues decreased by 21% in Q3 after falling by 13% in the previous quarter. Lower demand for pressure-pumping jobs due to lower activity caused the revenue fall. However, RES’s acquisition of Spinnaker Oilwell Services improved its cementing business while rental tool sales improved. RES’s management, however, anticipates a “busy fourth quarter calendar” and will maintain its pricing discipline.
Net Income Dips In Q3: RES’s net income declined by 72% in Q3 2023 compared to a quarter ago. Its adjusted EBITDA margin shrank by 10.6 percentage points. Costs increased in Q3 due to the relatively fixed nature of direct employment cost, resulting in the net income decline. Read more about the company in our previous article here.
RES’s Clean Balance Sheet: RES maintained a debt-free balance sheet as of September 30. This, along with a cash balance of $172 million, 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.
