RPC Earnings: Here’s Why the Stock is Down Now

RPC Inc. (NYSE:RES) delivered a profit and met Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 1.31%.

RPC Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 42.42% to $0.19 in the quarter versus EPS of $0.33 in the year-earlier quarter.

Revenue: Decreased 8.5% to $457.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: RPC Inc. reported adjusted EPS income of $0.19 per share. By that measure, the company missed the mean analyst estimate of $0.19. It beat the average revenue estimate of $441.5 million.

Quoting Management: “During the second quarter of 2013, RPC continued to be impacted by pricing weakness in all of our service lines,” stated Richard A. Hubbell, RPC’s President and Chief Executive Officer. “Recent industry activity levels coupled with the large domestic fleet of available service equipment continue to create challenges. The average U.S. domestic rig count during the second quarter was 1,761, a 10.6 percent decrease compared to the same period in 2012, and an increase of less than one percent compared to the first quarter of 2013. The average price of natural gas was $3.97 per Mcf, a 73.4 percent increase compared to the prior year, and a 13.4 percent increase compared to the first quarter of 2013. The average price of oil during the quarter was $94.07 per barrel, a 1.2 percent increase compared to the prior year and a decrease of less than one percent compared to the first quarter of 2013. The unconventional rig count, an important indicator of the demand for RPC’s services, decreased by 6.8 percent compared to the prior year, and during the second quarter of 2013 represented 74.1 percent of U.S. domestic drilling activity. Our revenues decreased by less than the decline in the total domestic rig count compared to the prior year due to RPC having benefited from greater service-intensive completion activities and a larger fleet of equipment in our pressure pumping service line.”

Key Stats (on next page)…

Revenue increased 7.46% from $425.82 million in the previous quarter. EPS increased 18.75% from $0.16 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.23 to a profit $0.21. For the current year, the average estimate has moved down from a profit of $0.89 to a profit of $0.79 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)