RPC Inc (RES) Misses Q3 EPS by 1c

RPC Inc (NYSE: RES) reported Q3 EPS of ($0.16), $0.01 worse than the analyst estimate of ($0.15). Revenue for the quarter came in at $291.9 million versus the consensus estimate of $294.27 million.

Management Commentary

"The decline in the U.S. domestic oilfield unexpectedly steepened in the third quarter due to continued weakness in oil prices and concerns about oil prices in the near term," stated Richard A. Hubbell, RPC's President and Chief Executive Officer. "The average U.S. domestic rig count during the third quarter was 864, a decrease of 54.6 percent compared to the same period in 2014, and a decrease of 4.7 percent compared to the second quarter of 2015. The average price of natural gas was $2.73 per Mcf, a 30.2 percent decrease compared to the prior year, but a 1.1 percent increase compared to the second quarter of 2015. The unconventional rig count declined by 51.5 percent compared to the prior year and 6.4 percent sequentially. The average price of oil during the quarter was $46.81 per barrel, a 52.1 percent decrease compared to the prior year and an 18.6 percent decrease compared to the second quarter of 2015. This unexpected deterioration in our industry metrics prompted our customers to seek additional pricing concessions for most of our services, especially pressure pumping and coiled tubing.

"RPC continues to act to preserve our balance sheet strength and maintain our service delivery capability in preparation for our industry's recovery. However, we also acknowledge that this protracted downturn requires additional cost reduction measures, which we undertook during the third quarter and will continue to examine during the coming months. We believe that the fourth quarter of 2015 will continue to be difficult, as our customers exhaust their 2015 budgets and have no incentive to maintain current operational levels in the near term. We note that service intensity in our pressure pumping service line increased during third quarter, even in our declining operating environment, which offers a glimpse of an eventual recovery. I am pleased to report that as a result of our expense controls, working capital management and capital expenditure reduction initiatives, the balance on our syndicated credit facility declined to $19.5 million at the end of the third quarter, a decline of $35.4 million compared to the end of the second quarter. Our financial strength will allow us to endure throughout the remainder of this downturn and emerge as a stronger service provider when the industry eventually recovers," concluded Hubbell.

For earnings history and earnings-related data on RPC Inc (RES) click here.

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