Financial Performance - Archrock reported a fourth quarter 2024 net income of $59.8 million, a 81% increase from $33.0 million in Q4 2023, with an EPS of $0.34 compared to $0.21[7]. - For the full year 2024, net income reached $172.2 million, up from $105.0 million in 2023, with adjusted EBITDA increasing to $595.4 million from $450.4 million[11]. - The fourth quarter 2024 revenue was $326.4 million, a 26% increase from $259.6 million in Q4 2023, while full year revenue grew to $1,157.6 million from $990.3 million[8]. - Net income for Q4 2024 was $59,758,000, up from $37,516,000 in Q3 2024, and $33,002,000 in Q4 2023, representing a significant year-over-year increase[22]. - Adjusted EBITDA for the year ended December 31, 2024, reached $595,434,000, compared to $450,387,000 for the previous year, indicating a growth of approximately 32.3%[22]. - Adjusted EBITDA for Q4 2024 was $183.8 million, representing 56% of total revenue, compared to 52% in Q3 2024 and 46% in Q4 2023[41]. - Adjusted net income for Q4 2024 reached $61,533,000, up from $47,313,000 in Q3 2024 and $33,002,000 in Q4 2023[47]. Revenue and Margins - Archrock's contract operations segment revenue for Q4 2024 was $286.5 million, a 34% increase from $213.0 million in Q4 2023, with an adjusted gross margin percentage of 70%[13]. - Contract operations revenue for Q4 2024 was $286,466,000, an increase of 16.7% from $245,420,000 in Q3 2024 and up from $213,022,000 in Q4 2023[22]. - Adjusted gross margin percentage for contract operations improved to 70% in Q4 2024, compared to 67% in Q3 2024 and 64% in Q4 2023[22]. - The adjusted gross margin percentage for total revenue improved to 64% in Q4 2024 from 61% in Q3 2024 and 57% in Q4 2023[41]. Dividends and Cash Flow - The company declared a quarterly dividend of $0.19 per share for Q4 2024, representing a 15% increase year-over-year, with a dividend coverage ratio of 3.5x[16]. - Cash available for dividend in Q4 2024 was $118,089,000, up from $92,887,000 in Q3 2024 and $71,484,000 in Q4 2023, reflecting a strong increase in cash generation[22]. - The company reported a dividend coverage ratio of 3.5x for Q4 2024, up from 3.0x in Q3 2024 and 2.8x in Q4 2023, indicating strong cash flow relative to dividends[22]. - Total dividends paid to stockholders in 2024 amounted to $110.37 million, up from $95.80 million in 2023[59]. - Cash available for dividend guidance for 2025 is projected to be between $456 million and $471 million[65]. Guidance and Future Outlook - For 2025, Archrock provided guidance for net income between $253 million and $293 million, and adjusted EBITDA between $750 million and $790 million[17]. - The company anticipates contract operations revenue for 2025 to be between $1.2 billion and $1.235 billion, with adjusted gross margin percentage expected to be between 68% and 71%[17]. - Archrock's investment in high-quality assets and innovative technology is expected to drive continued growth and shareholder returns in 2025[4]. - The company is focused on capital expenditures for growth, estimating $330 million to $370 million for growth capital expenditures in 2025[17]. - Maintenance capital expenditures for 2025 are estimated to be between $105 million and $115 million[65]. Debt and Leverage - Archrock's leverage ratio improved to 3.3x as of December 31, 2024, down from 3.5x a year earlier, with long-term debt at $2.2 billion[15]. - Long-term debt as of December 31, 2024, was $2.2 billion, a decrease from $2.2 billion in Q3 2024 and an increase from $1.6 billion in Q4 2023[44]. Operational Metrics - Total available horsepower at the end of Q4 2024 was 4,401, compared to 4,418 at the end of Q3 2024 and 3,759 at the end of Q4 2023[22]. - Capital expenditures for Q4 2024 totaled $98.0 million, significantly higher than $70.0 million in Q3 2024 and $36.7 million in Q4 2023[41]. - The company incurred transaction-related costs of $2,247,000 in Q4 2024, down from $9,220,000 in Q3 2024[51]. - Interest expense for Q4 2024 was $38,238,000, compared to $30,179,000 in Q3 2024 and $27,938,000 in Q4 2023[55]. - The company reported a gross margin of $151,170,000 for Q4 2024, which is 46% of total revenues, compared to 44% in Q3 2024[53]. Conference Call - The company plans to host a conference call on February 25, 2025, to discuss the financial results for Q4 and the full year 2024[25].

Archrock Inc. (AROC) came out with quarterly earnings of $0.35 per share, beating the Zacks Consensus Estimate of $0.31 per share. This compares to earnings of $0.21 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 12.90%. A quarter ago, it was expected that this natural gas compression services business would post earnings of $0.28 per share when it actually produced earnings of $0.28, delivering no surprise.Over the last four ...

Core Insights - Archrock reported a strong performance in Q4 2024, concluding a record-setting year with significant increases in utilization and profitability [3][4] - The company achieved a 500 basis point increase in contract operations adjusted gross margin, over 60% growth in net income, and more than 30% growth in adjusted EBITDA year-over-year [3][4] - Archrock returned $124 million to shareholders through dividends and share buybacks while maintaining a leverage ratio of 3.3x [3][6] Financial Performance - Q4 2024 net income was $59.8 million, up from $33.0 million in Q4 2023, with an EPS increase from $0.21 to $0.34 [7][9] - Total revenue for Q4 2024 was $326.4 million, compared to $259.6 million in Q4 2023, while full-year revenue reached $1,157.6 million, up from $990.3 million in 2023 [9][11] - Adjusted EBITDA for Q4 2024 was $183.8 million, compared to $120.3 million in Q4 2023, and for the full year, it was $595.4 million, up from $450.4 million in 2023 [9][12] Segment Performance - Contract operations segment revenue for Q4 2024 was $286.5 million, a 34% increase from $213.0 million in Q4 2023, with an adjusted gross margin of $200.2 million, up 46% [13] - Aftermarket services segment revenue for Q4 2024 was $40.0 million, down from $46.6 million in Q4 2023, attributed to seasonal delays [14] - The adjusted gross margin percentage for contract operations improved to 70% in Q4 2024 from 64% in Q4 2023 [13] Balance Sheet and Capital Allocation - As of December 31, 2024, Archrock's long-term debt stood at $2.2 billion, with available liquidity of $688 million and a leverage ratio of 3.3x, down from 3.5x a year earlier [15] - The company declared a quarterly dividend of $0.19 per share for Q4 2024, reflecting a 15% increase year-over-year, with a dividend coverage ratio of 3.5x [16] - Archrock plans to invest in profitable growth, with guidance for 2025 indicating net income between $253 million and $293 million and adjusted EBITDA between $750 million and $790 million [17][18] Market Outlook - Archrock anticipates continued strong demand driven by rising energy needs, particularly for natural gas to support LNG exports and power generation [5][6] - The company has a large contracted backlog for 2025 and is already booking units for 2026 delivery, indicating sustained customer demand [5][6] - Management emphasizes the importance of high-quality assets and innovative technology in driving value for customers and shareholders [4][6]

Core Insights - Archrock, Inc. will host a conference call on February 25, 2025, to discuss its Q4 and full-year 2024 financial results and provide guidance for 2025 [1] - The earnings report for Q4 2024 will be released prior to the conference call [1] Company Overview - Archrock is an energy infrastructure company focused on midstream natural gas compression, committed to safe and environmentally responsible practices [3] - The company is headquartered in Houston, Texas, and is a leading provider of natural gas compression services in the U.S. [3] - Archrock also offers aftermarket services for customers owning compression equipment [3]

Company Performance - Archrock Inc. closed at $28.13, reflecting a -1.71% change from the previous day, underperforming the S&P 500 which gained 0.03% [1] - Over the past month, Archrock's shares have appreciated by 6.2%, outperforming the Oils-Energy sector's gain of 0.76% and the S&P 500's gain of 4.19% [1] Earnings Projections - The projected earnings per share (EPS) for Archrock is $0.31, indicating a 47.62% increase from the same quarter last year [2] - The Zacks Consensus Estimate for revenue is $326.08 million, representing a 25.61% increase from the year-ago period [2] Analyst Sentiment - Recent shifts in analyst projections for Archrock should be monitored, as positive revisions indicate optimism regarding the company's business and profitability [3] - The Zacks Rank system, which reflects these revisions, currently ranks Archrock as 2 (Buy) [5] Valuation Metrics - Archrock has a Forward P/E ratio of 20.84, which is a premium compared to the industry's average Forward P/E of 15.02 [6] - The company has a PEG ratio of 1.74, while the Oil and Gas - Field Services industry has an average PEG ratio of 1.68 [6] Industry Context - The Oil and Gas - Field Services industry, part of the Oils-Energy sector, has a Zacks Industry Rank of 206, placing it within the bottom 18% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Company Performance - Archrock Inc. (AROC) closed at $29.70, reflecting a +0.34% change from the previous day's closing price, outperforming the S&P 500's daily loss of 0.29% [1] - The natural gas compression services business has seen a 19.26% increase in shares over the last month, contrasting with the Oils-Energy sector's loss of 1.71% and the S&P 500's gain of 2.52% [1] Financial Expectations - Archrock Inc. is expected to report an EPS of $0.31, representing a 47.62% increase compared to the same quarter last year [2] - Revenue is anticipated to be $326.08 million, indicating a 25.61% rise from the same quarter last year [2] Analyst Sentiment - Recent revisions to analyst forecasts for Archrock Inc. are important, as they reflect near-term business trends and analyst optimism regarding the company's profitability [3] - The Zacks Rank system, which integrates estimate changes, currently rates Archrock Inc. at 4 (Sell) [5] Valuation Metrics - Archrock Inc. has a Forward P/E ratio of 21.55, which is higher than the industry average of 15.35 [6] - The company has a PEG ratio of 1.8, compared to the industry average PEG ratio of 1.66 [6] Industry Context - The Oil and Gas - Field Services industry, part of the Oils-Energy sector, has a Zacks Industry Rank of 231, placing it in the bottom 8% of over 250 industries [7]

Core Viewpoint - The content emphasizes the importance of conducting personal due diligence and consulting competent advisors before making any financial decisions, particularly in the context of investments and trading [1]. Group 1 - The website provides general news, personal analysis, and third-party content intended for educational and research purposes [1]. - It explicitly states that the information does not constitute any recommendation or advice for investment actions [1]. - Users are advised to perform their own research and consider their financial situation before making decisions [1]. Group 2 - The website includes information about complex financial instruments such as cryptocurrencies and contracts for difference (CFDs), which carry a high risk of losing money [1]. - It encourages users to understand how these instruments work and the associated risks before investing [1].

Core Viewpoint - The Zacks Oil and Gas - Field Services industry is facing challenges due to strict capital management by upstream energy firms, leading to decreased demand for oilfield services and a challenging outlook for the sector [1][6]. Industry Overview - The Zacks Oil and Gas - Field Services industry includes companies that provide support services to exploration and production players, such as manufacturing, repairing, and maintaining wells, drilling equipment, and leasing drilling rigs [3]. - These firms assist upstream energy players in locating oil and natural gas, drilling, and evaluating hydrocarbon wells, making their business closely tied to upstream expenditures [4]. Current Trends - The industry is characterized by high volatility, with demand for oilfield services closely linked to exploration and production activities, which are influenced by commodity pricing [5]. - There is a noted slowdown in upstream spending, as companies prioritize stockholder returns over increasing output, leading to reduced drilling activities and lower demand for oilfield services [6]. - The success of companies in this sector is heavily dependent on their ability to navigate the energy transition landscape and meet decarbonization goals, as failing to do so could negatively impact cash flows [7]. Industry Performance - The Zacks Oil and Gas - Field Services industry currently holds a Zacks Industry Rank of 212, placing it in the bottom 15% of over 250 Zacks industries, indicating a bearish outlook [8][9]. - Over the past year, the industry has underperformed compared to the S&P 500 and the broader Zacks Oil - Energy sector, with an 11% increase versus the S&P 500's 28.5% and the sector's 19.4% growth [10]. Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 7.04X, compared to the S&P 500's 18.59X and the sector's 3.90X, reflecting the capital-intensive nature of the companies involved [11][12]. Company Highlights - **Archrock Inc.**: Recently acquired Total Operations and Production Services, enhancing its capacity with a fully electric compression fleet and positioning itself as a leader in electrified natural gas compression [13]. - **Baker Hughes Co.**: Focused on growth through advanced LNG and energy technologies, with significant involvement in the Louisiana LNG project and expansion in Namibia, aiming to meet rising global energy demand [14]. - **Smart Sand Inc.**: A leading manufacturer of Northern White sand, known for its quality and cost-effectiveness, serving as a premium proppant in hydraulic fracturing processes [15].

Industry Overview - The Zacks Oil and Gas - Field Services industry is facing challenges due to strict capital management by upstream energy firms, leading to decreased demand for oilfield services [1] - Companies in this sector must effectively navigate the evolving energy transition landscape to succeed, as failing to meet energy transition objectives could negatively impact cash flow [1][6] - The industry comprises companies providing support services to exploration and production players, including well maintenance, drilling equipment leasing, and seismic testing [3] Current Trends - The demand for oilfield services is highly volatile and closely tied to exploration and production activities, making companies susceptible to commodity price fluctuations [4] - There has been a slowdown in drilling activities as upstream players prioritize stockholder returns over increasing output, resulting in lower demand for oilfield services [5] - The industry's ability to adapt to decarbonization and low-carbon technologies is crucial for maintaining cash flow [6] Industry Performance - The Zacks Oil and Gas - Field Services industry currently holds a Zacks Industry Rank of 212, placing it in the bottom 15% of over 250 Zacks industries, indicating a bearish outlook [7][8] - Over the past year, the industry has underperformed compared to the S&P 500 and the broader Zacks Oil - Energy sector, with an 11% increase versus 28.5% and 19.4% respectively [9] Valuation Metrics - The industry is currently trading at a trailing 12-month EV/EBITDA ratio of 7.04X, compared to the S&P 500's 18.59X and the sector's 3.90X [11] - Historical trading ranges for the industry have been between 1.01X and 12.73X over the past five years, with a median of 8.16X [11] Key Companies - **Archrock Inc (AROC)**: Recently acquired Total Operations and Production Services, enhancing its capacity with a fully electric compression fleet and positioning itself as a leader in electrified natural gas compression [13] - **Baker Hughes Company (BKR)**: Focused on growth through advanced LNG and energy technologies, with significant involvement in the Louisiana LNG project and expansion in Namibia [15] - **Smart Sand Inc (SND)**: A leading manufacturer of Northern White sand, known for its quality and cost-effectiveness, serving as a premium proppant in hydraulic fracturing [16]

Company Performance - Archrock Inc. (AROC) closed at $25.36, down 1.93% from the previous trading day, underperforming the S&P 500 which lost 1.11% [1] - Over the past month, Archrock's shares gained 2.13%, outperforming the Oils-Energy sector which declined by 11.62% and the S&P 500's loss of 1.7% [1] Earnings Projections - The upcoming earnings report for Archrock is projected to show earnings per share (EPS) of $0.31, a 47.62% increase year-over-year [2] - The Zacks Consensus Estimate for revenue is $326.08 million, reflecting a 25.61% increase from the same quarter last year [2] Analyst Estimates - Recent modifications to analyst estimates for Archrock indicate changing business trends, with positive revisions suggesting analyst optimism about the company's profitability [3] - The Zacks Rank system, which reflects these estimate changes, currently ranks Archrock at 4 (Sell) [5] Valuation Metrics - Archrock has a Forward P/E ratio of 18.83, which is higher than the industry average of 15.42, indicating it is trading at a premium [6] - The company has a PEG ratio of 1.57, compared to the industry average PEG ratio of 1.16, suggesting a higher expected earnings growth trajectory [7] Industry Context - The Oil and Gas - Field Services industry, to which Archrock belongs, has a Zacks Industry Rank of 200, placing it in the bottom 21% of over 250 industries [7] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]