TETRA Technologies (NYSE: TTI) reported Q2 EPS of $0.03, $0.02 better than the analyst estimate of $0.01. Revenue for the quarter came in at $260.07 million versus the consensus estimate of $238.17 million.

Stuart M. Brightman, TETRA's Chief Executive Officer, stated, "We are very pleased with the accelerated rate of improvement as each segment saw a material sequential improvement in revenue and adjusted EBITDA. Our strong presence in the US onshore markets, aided by the recent acquisition of SwiftWater, is meaningfully impacting our results. We are seeing better pricing and stronger equipment utilization in each of our segments. We are also seeing preliminary signs of an international recovery and new offshore projects being initiated, including a significant deepwater Gulf of Mexico completion fluids project for 2019. Our vertically integrated completion fluids network positions us well to capitalize on this recovery.

"We announced earlier in the quarter the agreement with Halliburton to further capitalize on this expected recovery by jointly marketing our innovative industry leading TETRA CS Neptune® completion fluids technology. We are very pleased to have this agreement in place with a leading global fluids provider such as Halliburton. TETRA CS Neptune® completion fluids are unique zinc-free, clear brine completion fluids that have significant potential for growth through global applications and as base fluids for other applications, such as packer and reservoir drill-in fluids. We look forward to working with Halliburton to expand sales and jointly develop new offerings and expect this to be a great relationship for years to come, especially as deepwater drilling activity comes back.

"Water & Flowback Services second quarter 2018 revenue increased 37% sequentially to $83.6 million led by a full quarter of SwiftWater operations and overall significantly stronger activity in the U.S. shale plays. In the second quarter of 2018, SwiftWater generated $28.6 million of revenue and $5.2 million profit before taxes, inclusive of $1.6 million of depreciation expense. The financial results of this acquisition are outperforming our acquisition expectations. We have been able to successfully cross sell our TETRA Steel™ 1200 proprietary lay-flat hose technology. We continue to see significant opportunities in this division and have increased our projected investments in capital given the strong returns from high utilization and better pricing as customers continue to deal with high volumes of water to complete fracking operations and handle high volumes of flow back sand and produced water. In addition to the Permian market, we are experiencing continued strong financial results in the Rockies, MidCon, Northeast and most recently also in South Texas. Water & Flowback Services profit before taxes was $8.3 million (9.9% of revenue), while adjusted EBITDA was $20.1 million (24.1% of revenue).

"Completion Fluids & Products revenue was $76.6 million for the second quarter of 2018, an increase of 44% from the first quarter of 2018. We are working with two major customers on the timing for TETRA CS Neptune® opportunities. We expect both opportunities to materialize by year-end. Completion Fluids & Products Division profit before taxes was $10.0 million (13.0% of revenue), while adjusted EBITDA was $13.7 million (17.9% of revenue).

"Second quarter 2018 Compression revenue increased 17% sequentially to $99.9 million. Compression Services gross margin excluding depreciation improved to 46.2% in the second quarter from 41.6% in the first quarter of 2018. New equipment orders of $25 million were received in the second quarter and another $18 million order was received in late July, reflecting our customers\' continued strong demand for compression to move associated gas. Our backlog was $102 million at the end of the second quarter. Compression loss before tax for the second quarter of 2018 was $8.7 million compared to a $14.0 million loss for the first quarter of 2018 and $6.2 million loss for the second quarter of 2017. Adjusted EBITDA was $22.4 million in the second quarter, compared to $18.9 million in the first quarter. On July 20, 2018, CSI Compressco LP declared a cash distribution attributable to the second quarter of 2018 of $0.1875 per outstanding common unit, which will be paid on August 14, 2018 to common unitholders of record as of the close of business on August 1, 2018. The distribution coverage ratio for the second quarter of 2018 was 0.65X."

GUIDANCE:

TETRA Technologies sees FY2018 revenue of $965-1005 million, versus the consensus of $963 million.

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