ATLANTA - RPC, Inc. (NYSE: NYSE:RES), a diversified oilfield services firm, disclosed its unaudited financial outcomes for the first quarter ending March 31, 2024, revealing a sequential revenue decrease of 4% to $377.8 million. The company's net income fell 32% to $27.5 million, with diluted earnings per share (EPS) at $0.13. The net income margin contracted by 290 basis points to 7.3%.
Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also declined 21% sequentially to $63.1 million, while the adjusted EBITDA margin shrank 340 basis points to 16.7%. These results mirror a softening demand in the oilfield services sector and strong competition, especially in the Permian Basin.
RPC's President and CEO, Ben M. Palmer, commented on the competitive market and expressed cautious optimism for increased customer activity in the latter half of 2024, contingent on sustained oil price momentum. He also noted the company's robust financial position, including $212 million in cash and a debt-free balance sheet.
The company executed $8.6 million in dividend payments and $9.9 million in share repurchases during the first quarter. RPC plans to introduce a new Tier 4 dual-fuel fleet by mid-year 2024 and continues to explore strategic investments and potential acquisitions to enhance its service offerings.
In terms of industry data, the U.S. rig count saw a marginal increase of 0.2% from the previous quarter, while oil and natural gas prices experienced slight declines.
RPC's technical services segment, which includes pressure pumping and other well services, saw a 4% drop in revenues to $356.4 million, with a 31% decrease in operating income. The support services segment, offering equipment rental and other assistance, reported a 9% revenue decline and a 29% fall in operating income.
The company will hold a conference call today to discuss the quarterly results. This financial report is based on a press release statement from RPC, Inc.
InvestingPro Insights
RPC, Inc. (NYSE: RES) has navigated the challenging oilfield services landscape with a notable financial prudence, as evidenced by its current market position. According to InvestingPro data, the company boasts a market capitalization of $1.68 billion and a Price/Earnings (P/E) ratio of 8.75, which adjusts slightly to 8.41 when considering the last twelve months as of Q4 2023.
This valuation metric suggests that the company is trading at a relatively modest earnings multiple, which could be attractive to value-oriented investors.
With a Price/Book ratio of 1.64 for the same period, RPC, Inc. demonstrates a balance between its market valuation and its book value, indicating that the shares might be reasonably priced in terms of the company's net assets.
InvestingPro Tips highlight that RPC, Inc. holds more cash than debt, which aligns with the CEO's comment on the company's strong financial position. The company's ability to cover interest payments with its cash flows and the fact that its liquid assets exceed short-term obligations provide further evidence of its financial health. Moreover, analysts predict that RPC, Inc. will remain profitable this year, which is corroborated by its profitability over the last twelve months.
For investors seeking a deeper dive into RPC, Inc.'s financials and future prospects, additional InvestingPro Tips can be found at https://www.investing.com/pro/RES. There are 6 more tips available, which could offer valuable insights into making an informed investment decision. To access these insights and more, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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