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RPC Inc. RES reported third-quarter 2024 adjusted earnings of 9 cents per share, which missed the Zacks Consensus Estimate of 14 cents. The bottom line improved from the year-ago figure of 8 cents.

Total quarterly revenues were $337.7 million, up from the year-ago quarter’s $330.4 million. The top line also missed the Zacks Consensus Estimate of $359 million.

The lower-than-expected quarterly earnings were primarily due to lower utilization and pricing levels in pressure pumping, along with rising cost of revenues.

RPC, Inc. Price, Consensus and EPS Surprise

RPC, Inc. price-consensus-eps-surprise-chart | RPC, Inc. Quote

Segmental Performance

Operating profit in the Technical Services segment totaled $16.3 million, lower than the year-ago quarter’s $18.9 million. The results were primarily influenced by decreased activity levels in pressure pumping, leading to negative impacts on fixed costs, especially labor, due to reduced leverage.

Operating profit in the Support Services segment amounted to $5.3 million, lower than the year-ago level of $6.9 million. This can be attributed to higher activity within rental tools, partially offset by the high fixed-cost structure inherent in these service lines.

Total operating profit in the quarter was $19.2 million, down from $22.7 million in the year-ago quarter. The average domestic rig count was 586, marking a 9.7% decline from the year-ago level.

The average oil price in the quarter was $76.57 per barrel, down 6.8% year over year. The average price of natural gas was $2.10 per thousand cubic feet, down 18.9% from the figure recorded in the corresponding period of 2023.

Costs & Expenses

In the third quarter, the cost of revenues increased to $247.5 million from $239.1 million in the prior-year period. Selling, general and administrative expenses amounted to $37.7 million, lower than the year-ago quarter’s $42 million.

Financials

RPC’s total capital expenditure was $179.5 million.

As of Sept. 30, the company had cash and cash equivalents of $276.9 million and managed to maintain a debt-free balance sheet.

Zacks Rank and Key Picks

Currently, RES carries a Zacks Rank #4 (Sell).

Investors interested in the energy sector may look at some better-ranked stocks like Archrock Inc. AROC, Sunoco LP SUN and The Williams Companies, Inc. WMB. While Archrocksports a Zacks Rank #1 (Strong Buy), Sunoco and Williams Companies carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

The Zacks Consensus Estimate for AROC’s 2024 EPS is pegged at $1.10. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes over 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value Score of A.

The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $9.28 and $6.76, respectively. The partnership has witnessed upward earnings estimate revisions for 2025 in the past seven days.

The Williams Companies is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing, and transporting natural gas and natural gas liquids. Boasting a widespread pipeline system of more than 33,000 miles, Williams is one of the largest domestic transporters of natural gas by volume.

The Zacks Consensus Estimate for WMB’s 2024 EPS is pegged at $1.75. The company has witnessed upward earnings estimate revisions for 2024 in the past seven days.

Zacks Investment Research

Tech stocks outperformed on Thursday, driven by Tesla Inc. , which skyrocketed 18% in midday trading following stronger-than-expected quarterly financial results.

The electric vehicle giant is on track for its best session since March 2021.

Despite Tesla’s spectacular rally, broader market sentiment remained cautious, reflecting recent trends of subdued risk appetite.

In macroeconomic news, weekly jobless claims dropped significantly, coming in below expectations and suggesting ongoing resilience in the labor market.

Meanwhile, private sector activity surveys revealed better-than-expected conditions in both services and manufacturing this month and a further reduction in price pressures.

Both the S&P 500 and Russell 2000 traded flat, while the Dow Jones fell 0.6%. The consumer discretionary sector led gains, heavily influenced by Tesla's stellar performance.

The U.S. dollar softened slightly, and Treasury yields edged lower, easing pressure on gold. The SPDR Gold Trust rose 0.6%.

Oil prices dropped 1%, heading for a second consecutive day of losses. Meanwhile, Bitcoin gained 1.8%.

Thursday’s Performance In Major US Indices, ETFs

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust flattened at $577.32.
• The SPDR Dow Jones Industrial Average fell 0.7% to $422.33.
• The tech-heavy Invesco QQQ Trust Series rose 0.4% to $489.81.
• The iShares Russell 2000 ETF inched 0.1% down to $218.88.
• The Consumer Discretionary Select Sector SPDR Fund outperformed, up by 2.5%, predominately affected by Tesla. The Materials Select Sector SPDR Fund lagged, down 1.4%.

Thursday’s Stock Movers

Stocks reacting to earnings results include:

• T-Mobile US Inc. , up over 4%,
• International Business Machines Corp. , down over 6%,
• ServiceNow Inc. , up over 5%,
• Lam Research Corp. , up 3.8%,
• Newmont Corp. , down over 9%,
• United Rentals Inc. , down 2%,
• Las Vegas Sands Corp. , up 1.3%,
• Raymond James Financial Inc. , up over 7%,
• S&P Global Inc. , down 2.4%,
• Union Pacific Corp. , down 5%,
• Honeywell International Inc. , down 4.4%,
• KKR & Co. Inc. , up 3.4%,
• United Parcel Service Inc. , up 5.1%,
• Carrier Global Corp. , down 7%,
• Nasdaq Inc. , up 1.6%,
• Valero Energy Corp. , up 0.7%,
• CBRE Group Inc. up by over 9%,
• Dow Inc. , down 1.1%,
• Southwest Airlines Company dropped over 3%, despite posting better-than-expected results and reaching a deal with Elliott Investment Management on the board’s composition. However, the CEO warned of potential delivery delays due to Boeing Co.‘s ongoing machinist strike.

Large-cap companies slated to report results after the close include Capital One Financial Corp. , Ameriprise Financial Inc. , Edward Lifesciences Corp. , ResMed Inc. , DexCom Inc. , and Deckers Outdoor Corp. .

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