ATLANTA - RPC, Inc. (NYSE: NYSE:RES), a prominent provider of diversified oilfield services, disclosed a decline in its third-quarter financial performance for the period ending September 30, 2024. The company reported a sequential revenue drop of 7% to $337.7 million, with net income falling 42% to $18.8 million, and diluted earnings per share (EPS) at $0.09. The net income margin decreased to 5.6%, a 330 basis point reduction from the previous quarter.
Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also saw a decline, down 19% to $55.2 million, with the adjusted EBITDA margin shrinking to 16.4%. The results were primarily attributed to lower utilization and pricing in pressure pumping, while other service lines showed more stability.
Ben M. Palmer, President and CEO of RPC, acknowledged the challenging market conditions, citing lower oil prices and rig count as contributing factors. Despite the downturn, Palmer noted that the company's tier 4 dual fuel assets remained highly utilized and that RPC is looking to expand innovative services in coiled tubing and downhole tools.
The company's balance sheet remained strong, ending the quarter with $277 million in cash and no debt. RPC also declared a regular quarterly cash dividend of $0.04 per share, payable on December 10, 2024.
Industry data reflected a slight decrease in the U.S. rig count and a drop in oil prices, which impacted the company's financial results. RPC's pressure pumping services experienced a 12% revenue decline, while other service lines combined for a 4% decrease.
RPC maintained its commitment to strategic growth, expressing interest in high-quality acquisitions and the development of new products and services. The company's financial strategy includes supporting existing businesses, potential mergers and acquisitions, and dividend payments.
This report is based on a press release statement from RPC, Inc. and does not include any additional analysis or commentary.
In other recent news, RPC Inc has been under the financial microscope following mixed results in its revenue streams. The company reported a 3.6% sequential drop in total revenue, despite a 7.9% increase in non-pressure pumping revenue. However, RPC Inc's operating margins surpassed expectations at 9.7%. Notably, the company also reported an 18.6% sequential rise in EBITDA, which exceeded Stifel's projections by 17.6%.
In response to these developments, Stifel raised its price target for RPC Inc to $8, maintaining a Hold rating. The company's Q2 results showcased a revenue decline of 4% to $364.2 million, countered by an 18% increase in net income to $32.4 million. Despite the challenges in pressure pumping, RPC Inc managed to boost its profitability through robust demand and margin improvements in key service lines.
The company also announced a regular quarterly cash dividend of $0.04 per share and the introduction of a new Tier 4 dual fuel fleet. These recent developments reflect RPC's strategic approach to navigating the oilfield services market efficiently.
InvestingPro Insights
RPC, Inc.'s recent financial performance aligns with several key metrics and insights from InvestingPro. Despite the challenging market conditions highlighted in the company's Q3 2024 report, RPC maintains a solid financial foundation. According to InvestingPro data, the company boasts a market capitalization of $1.33 billion and a P/E ratio of 11.28, suggesting a relatively modest valuation in the current market.
An InvestingPro Tip indicates that RPC "holds more cash than debt on its balance sheet," which is consistent with the company's reported strong cash position of $277 million and absence of debt. This financial prudence positions RPC well to weather industry volatility and potentially pursue strategic opportunities.
Another relevant InvestingPro Tip notes that RPC's "cash flows can sufficiently cover interest payments." This insight, coupled with the company's debt-free status, underscores RPC's financial stability even as it navigates a downturn in the oil services sector.
The company's revenue for the last twelve months as of Q2 2024 stood at $1.47 billion, with a gross profit margin of 27.92%. While these figures reflect the industry challenges, RPC's ability to maintain profitability is noteworthy. The company's dividend yield of 2.54% as of the latest data point also demonstrates a commitment to shareholder returns, aligning with the quarterly dividend announcement in the earnings report.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and metrics that could provide deeper insights into RPC's financial health and market position. The platform currently lists 5 more tips for RPC, which could be valuable for those looking to make informed investment decisions in the volatile energy services sector.
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