Revenues Increased In Q4: Quarter-over-quarter, RPC’s (RES) revenues increased by 19% in Q4 due primarily to higher pressure pumping revenues, recovering from the 20% fall in the previous quarter. Despite uncertainty over completion activity in the industry, higher demand for pressure-pumping jobs caused the revenue rise. RES plans to add a Tier 4 dual-fuel pressure pump by Q2 2024, replacing a Tier 2 diesel pressure pump.
Net Income Zooms In Q4: RES’s net income more than doubled in Q4 2023 compared to a quarter ago. Its adjusted EBITDA margin expanded by 760 basis points during this period. Selling, general, and administrative expenses decreased in Q4 due to reduced incentive compensation. Higher revenues and cost control measures resulted in the EBITDA margin expansion in Q4 and the rise in net income. However, lower activity in rental tools and the high fixed costs adversely affected the financial results of the Support Services segment. Read more about the company in our previous article here.
RES’s Strengthening Balance Sheet: RES maintained a debt-free balance sheet as of December 31. This, along with a cash balance of $223 million and a $100 million revolving credit facility, would allow for share buybacks and continue with dividend payments ($0.04 per share). After the Spinnaker cementing business acquisition in 2023, RES’s management, backed by a strong balance sheet, is “assessing additional acquisition opportunities” to enhance its growth outlook.
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.
