Core Insights - The Zacks Rank system emphasizes earnings estimates and revisions to identify winning stocks, while also considering trends in value, growth, and momentum for strong stock picks [1][2] Company Analysis - RPC (RES) is highlighted as a stock to monitor, currently holding a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [3] - RES has a Price-to-Book (P/B) ratio of 1, which is favorable compared to the industry average of 1.74. The P/B ratio for RES has fluctuated between 0.86 and 1.67 over the past year, with a median of 1.26 [4] - The Price-to-Cash Flow (P/CF) ratio for RES stands at 4.77, which is attractive relative to the industry average of 5.90. The P/CF ratio has ranged from 4.13 to 6.73 in the past year, with a median of 5.50 [5] - Overall, the metrics suggest that RES is likely undervalued, and when considering its earnings outlook, it appears to be an impressive value stock at this time [6]

Core Insights - RPC Inc. reported first-quarter 2025 adjusted earnings of 6 cents per share, missing the Zacks Consensus Estimate of 7 cents, and down from 13 cents in the previous year [1] - Total quarterly revenues were $332.9 million, a decrease from $377.8 million year-over-year, but exceeded the Zacks Consensus Estimate of $332 million [1] Financial Performance - The weak quarterly earnings were attributed to flat pressure pumping revenues and a slight decline in performance across other service lines [2] - Total operating profit for the quarter was $12.4 million, down from $32.3 million in the year-ago quarter [4] - Operating profit in the Technical Services segment was $14 million, significantly lower than $31.9 million in the previous year [3] - Operating profit in the Support Services segment was $2.7 million, down from $3.6 million year-over-year [3] Market Conditions - The average domestic rig count was 588, reflecting a 5.6% decrease year-over-year [4] - The average oil price in the quarter was $71.93 per barrel, down 7.1% from the previous year [4] - The average price of natural gas was $4.14 per thousand cubic feet, up 92.6% compared to the same period in 2024 [4] Costs & Expenses - Cost of revenues decreased to $243.9 million from $250.2 million in the prior-year period [5] - Selling, general and administrative expenses rose to $42.5 million, compared to $41.2 million in the year-ago quarter [5] Financial Position - RPC's total capital expenditure was $32.3 million [6] - As of March 31, the company had cash and cash equivalents of $326.7 million and maintained a debt-free balance sheet [6]

Financial Performance - Total revenues for Q1 2025 were $332.9 million, a decrease of $45.0 million or 11.9% compared to Q1 2024[105] - Net income for Q1 2025 was $12.0 million, or $0.06 diluted earnings per share, down from $27.5 million, or $0.13 diluted earnings per share in Q1 2024[106] - EBITDA for Q1 2025 was $48.9 million, with an EBITDA margin of 14.7%, compared to $63.1 million and 16.7% in Q1 2024[129] - Cash provided by operating activities decreased to $39.9 million in Q1 2025 from $56.6 million in Q1 2024[130] - Cost of revenues decreased by 11.8% to $243.9 million in Q1 2025, in line with the decrease in revenues[121] - Selling, general and administrative expenses increased to $42.5 million in Q1 2025, primarily due to ERP system implementation costs[122] Cash Flow and Capital Expenditures - Free cash flow increased to $7.6 million in Q1 2025, up from $3.8 million in Q1 2024, primarily due to lower capital expenditures[130] - Cash used for investing activities decreased by $21.6 million to $27.4 million for the three months ended March 31, 2025, primarily due to a reduction in capital expenditures from $52.8 million in 2024 to $32.3 million in 2025[140] - Cash used for financing activities decreased by $7.0 million to $11.7 million for the three months ended March 31, 2025, mainly due to fewer repurchases of common shares[141] - The company expects capital expenditures, including recently acquired Pintail, to be between $165 million and $215 million in 2025, with $32.3 million already spent as of March 31, 2025[149] Revenue Segments and Market Conditions - The Technical Services segment revenues decreased by 12.5% in Q1 2025, primarily due to lower pressure pumping revenues[117] - The average price of natural gas increased by 70.4% in Q1 2025 compared to the same period in the prior year[116] - International revenues represented 2.4% of total revenues in Q1 2025, slightly down from 2.6% in Q1 2024[115] - The company believes that international revenues will continue to be less than 10% of consolidated revenues in the foreseeable future[175] - The company projects that long-term demand for oil and natural gas should drive increased activity in most operating basins[174] - The company acknowledges that the recent decline in oil prices could lead customers to delay completion activities[172] Future Outlook and Strategic Plans - The company is currently evaluating future investments and options to upgrade equipment across the business[149] - The company continues to monitor the supply and demand for its services, with a focus on increasing customer preferences for lower emission and more efficient equipment[160] - The company expects to continue paying cash dividends to common stockholders, subject to industry conditions and financial performance[175] - The company has ongoing sales and use tax audits that could result in unfavorable outcomes, but the exposure has been recorded to the extent it is estimable[150] - The company filed a shelf registration statement on April 23, 2025, allowing for the offering of securities up to $300 million, subject to market conditions[148] Liquidity and Financial Health - The company anticipates that the liquidity provided by existing cash and cash equivalents will be sufficient to meet requirements for at least the next twelve months[175] - The company has a $100.0 million revolving credit facility with $83.9 million available as of March 31, 2025, and no outstanding borrowings[144] - The company is subject to interest rate risk exposure through borrowings, but as of March 31, 2025, there were no outstanding interest-bearing advances on its credit facility[176] Dividends and Shareholder Returns - A regular quarterly cash dividend of $0.04 per share was declared, payable on June 10, 2025, to common stockholders of record on May 9, 2025[154]

Financial Data and Key Metrics Changes - First quarter revenues decreased by 1% to $333 million compared to the fourth quarter of 2024 [24] - EBITDA increased to $49.489 million from $46.1 million, with an EBITDA margin rising by 100 basis points sequentially to 14.7% [29] - Diluted EPS remained flat at 6¢ compared to the fourth quarter [28] Business Line Data and Key Metrics Changes - Pressure pumping revenues were essentially flat sequentially, representing 40.1% of total revenues [24][7] - Downhole tools revenues were flat, accounting for 28.2% of total revenues [24][12] - Rental tools saw a notable gain of about 7% [13] Market Data and Key Metrics Changes - The overall service lines in aggregate declined by 1% [7] - Demand and utilization for tier two diesel equipment remain challenging, with competitive pricing in the market [9] Company Strategy and Development Direction - The acquisition of Pentel for $245 million is expected to enhance operational scale and focus on high cash flow generating service lines [14][20] - The company aims to balance pricing and utilization strategies while maintaining asset quality [10] - Future capital expenditures are projected between $165 to $215 million, primarily for maintenance [29] Management's Comments on Operating Environment and Future Outlook - The management expressed concerns about macro uncertainties driven by tariffs and their impact on inflation and the economy [35] - Oil prices falling to the low $60 range may affect customer completion activities [36] - Despite uncertainties, the company maintains a strong balance sheet and secure dividends [37] Other Important Information - The company filed an S-3 registration statement with the SEC for the Rollins Family Control Group shares, viewed as good corporate housekeeping [34] - Steve Lewis was welcomed to the board of directors, while Gary Rollins and Pam Rollins retired [39] Q&A Session Summary Question: What are the current pricing conversations in the pressure pumping market? - Management noted that while discussions are similar to previous cycles, the current circumstances may impact these discussions due to lower oil prices [48][50] Question: What are the capital allocation priorities post-Pentel acquisition? - The focus is on accretive transactions, exposure to larger customers, and businesses with good free cash flow potential [52][54] Question: What is the expected revenue for Pentel? - Pentel generated over $400 million in 2024, with quarterly revenues around $100 million [56][58] Question: Is there a shift in customer activity towards lower CapEx projects? - Management indicated it is early to determine shifts but acknowledged that such changes have occurred in prior cycles [66][72] Question: Are there any signs of increased gas-directed activity? - Management believes that any uptick in gas-directed activity is likely further down the road [74][76] Question: What is the company's stance on selling older equipment? - The company monitors its equipment and aims to avoid reintroducing older assets into the market, focusing on reallocating them to other service lines [92][94] Question: What factors would lead to an acceleration in CapEx spending? - CapEx spending will depend on market conditions and the need to maintain equipment or pursue accretive opportunities [100][101] Question: Is the company focused on consolidating the Permian market or open to other basins? - Management stated they are open to opportunities in various basins, not just the Permian [108][110]

Financial Data and Key Metrics Changes - Revenues decreased by 1% to $333 million in the first quarter compared to the previous quarter [17] - EBITDA increased to $48.9 million from $46.1 million, with EBITDA margin rising by 100 basis points to 14.7% [21] - Diluted EPS remained flat at $0.06 [21] - Operating cash flow was $39.9 million, with free cash flow of $7.6 million after capital expenditures of $32.3 million [21] Business Line Data and Key Metrics Changes - Pressure pumping revenues accounted for 40.1% of total revenues, while downhole tools represented 28.2%, coiled tubing 9.6%, cementing 8.3%, and rental tools 4.6% [17] - Pressure pumping revenues were flat sequentially, while other service lines collectively declined by 1% [6][17] - Rental tools saw a notable gain of approximately 7% [10] Market Data and Key Metrics Changes - The company noted challenges in demand and utilization for Tier two diesel equipment, with a highly competitive pricing environment in the spot and semi-dedicated frac market [7] - The acquisition of Pentel is expected to increase the company's concentration in the Permian Basin to approximately 60% of total revenues [15] Company Strategy and Development Direction - The company aims to bolster less capital-intensive service lines through organic investments and acquisitions to drive growth and reduce volatility [10] - The strategic rationale for the Pentel acquisition includes improving margins, increasing operational scale, and focusing on high cash flow-generating service lines [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about macro uncertainties driven by tariffs and their potential impact on inflation and equipment prices [25] - The company remains confident in its strong balance sheet and liquidity to navigate volatility and capitalize on opportunities [27] Other Important Information - The company has filed an S-3 registration statement with the SEC regarding the Rollins family control group shares, which is viewed as good corporate housekeeping [24] - The management team remains focused on maintaining operational stability and long-term shareholder returns [28] Q&A Session Summary Question: What are the current pricing conversations in the pressure pumping market? - Management indicated that while discussions are similar to prior periods, the current circumstances may impact these discussions due to lower oil prices and customer responses [35][37] Question: What are the capital allocation priorities following the Pentel acquisition? - The focus is on accretive transactions, exposure to larger customers, and service lines with good free cash flow potential [38][39] Question: What is the expected revenue for the Pentel business? - Pentel generated approximately $400 million in revenue in 2024, with each quarter around $100 million [40] Question: Are there shifts in customer activity towards lower CapEx projects? - Management noted it is early to determine any significant shifts but acknowledged that such trends have occurred in prior cycles [45] Question: What is the visibility on job timelines for fracking? - Visibility varies by customer type, with semi-dedicated customers providing several months of visibility, while spot market customers offer much less [46][48] Question: Is the company considering selling any assets? - Management stated they monitor equipment closely and prefer to reallocate assets rather than sell them, ensuring they do not re-enter the competitive market [55][57] Question: What would trigger an acceleration in capital expenditures? - Capital expenditures will be based on market conditions and the need to maintain equipment, with potential for increased spending if accretive opportunities arise [58][60] Question: Is the company focused on consolidating the Permian market or open to other basins? - Management is open to opportunities in various basins, not just the Permian, and is exploring potential acquisitions in natural gas basins as well [62][63]

Financial Data and Key Metrics Changes - Revenues decreased by 1% to $333 million in the first quarter compared to the fourth quarter of 2024 [18] - EBITDA increased to $48.9 million from $46.1 million, with EBITDA margin rising by 100 basis points to 14.7% [22] - Diluted EPS remained flat at $0.06 [22] - Operating cash flow was $39.9 million, with free cash flow of $7.6 million after capital expenditures of $32.3 million [22] Business Line Data and Key Metrics Changes - Pressure pumping revenues accounted for 40.1% of total revenues, while downhole tools represented 28.2%, coiled tubing 9.6%, cementing 8.3%, and rental tools 4.6% [19] - Pressure pumping revenues were flat sequentially, while other service lines collectively declined by 1% [6][18] - Rental tools saw a notable gain of approximately 7% [11] Market Data and Key Metrics Changes - The company noted challenges in demand and utilization for Tier two diesel equipment, with a highly competitive pricing environment in the spot and semi-dedicated frac market [7] - The acquisition of Pentel is expected to increase the company's concentration in the Permian Basin to approximately 60% of total revenues [16] Company Strategy and Development Direction - The company aims to bolster less capital-intensive service lines through organic investments and acquisitions to drive growth and reduce volatility [11] - The strategic rationale for the Pentel acquisition includes improving margins, optimizing assets, and increasing operational scale through M&A [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about macro uncertainties driven by tariffs, which could impact equipment prices and overall industry capital spending [27] - Despite the challenges, the company maintains a strong balance sheet and ample liquidity to navigate volatility and pursue opportunities [28] Other Important Information - The company has filed an S-3 registration statement with the SEC for the Rollins family control group shares, which is viewed as good corporate housekeeping [25] - Steve Lewis has been elected to the Board of Directors, while Gary Rollins and Pam Rollins have retired [29] Q&A Session Summary Question: What are the current pricing conversations in the pressure pumping market? - Management noted that while each cycle is different, customers are responding to lower oil prices, leading to discussions that are somewhat similar to prior periods of market softness [37][38] Question: What are the capital allocation priorities following the Pentel acquisition? - The focus is on accretive transactions, exposure to larger customers, and service lines with good free cash flow potential [39][40] Question: What is the expected revenue contribution from the Pentel business? - Pentel generated approximately $400 million in revenue in 2024, with quarterly revenues around $100 million [41] Question: Are there shifts in customer activity towards lower CapEx projects? - Management indicated it is too early to determine any significant shifts but acknowledged that such trends have occurred in prior cycles [46] Question: What is the visibility on job timelines for fracking? - Visibility varies by customer type, with semi-dedicated customers providing several months of visibility, while spot market customers offer much less [48] Question: Is there an uptick in gas-directed activity? - Management believes any increase in gas-directed activity is likely further down the road, although there are some early signs [51] Question: What are the company's thoughts on older equipment being sold by competitors? - The company has seen opportunities but prefers not to invest in used equipment, focusing instead on reallocating assets within its service lines [58] Question: What would trigger an acceleration in capital expenditures? - Capital expenditures will be based on market conditions and the need to maintain equipment, with potential for increased spending if accretive opportunities arise [60][62] Question: Is the company focused on consolidating the Permian market or open to other basins? - Management is open to opportunities in other basins, not solely focused on the Permian, and is exploring various potential acquisitions [64][65]

Group 1: Earnings Performance - RPC reported quarterly earnings of $0.06 per share, missing the Zacks Consensus Estimate of $0.07 per share, and down from $0.13 per share a year ago, representing an earnings surprise of -14.29% [1] - The company posted revenues of $332.88 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.23%, but down from year-ago revenues of $377.83 million [2] - Over the last four quarters, RPC has surpassed consensus EPS estimates just once and topped consensus revenue estimates two times [2] Group 2: Stock Performance and Outlook - RPC shares have lost about 17% since the beginning of the year, compared to the S&P 500's decline of -8.6% [3] - The company's earnings outlook is crucial for investors, with current consensus EPS estimate for the coming quarter at $0.08 on revenues of $345.3 million, and $0.31 on revenues of $1.37 billion for the current fiscal year [7] - The estimate revisions trend for RPC is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Group 3: Industry Context - The Oil and Gas - Field Services industry, to which RPC belongs, is currently in the bottom 40% of the Zacks industry rankings, which can materially impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that tracking these revisions is important for investors [5]

Financial Performance - Revenues for Q1 2025 were $332.9 million, a decrease of 1% sequentially from Q4 2024[5]. - Net income was $12 million, down 6% sequentially, with diluted EPS at $0.06; net income margin decreased by 20 basis points to 3.6%[5][11]. - EBITDA increased by 6% sequentially to $48.9 million, with an EBITDA margin of 14.7%, up 100 basis points[5][12]. - Revenues for Q1 2025 were $332,877 thousand, a decrease of 11.9% compared to $377,833 thousand in Q1 2024[24]. - Net income for Q1 2025 was $12,030 thousand, down 56.2% from $27,467 thousand in Q1 2024[24]. - EBITDA for Q1 2025 was $48,894 thousand, representing an EBITDA margin of 14.7% compared to 16.7% in Q1 2024[30]. - Operating income increased to $12,386 thousand in Q1 2025 from $10,517 thousand in Q4 2024, reflecting a 17.7% quarter-over-quarter growth[24]. Cash Flow and Liquidity - Cash and cash equivalents at the end of Q1 2025 were $326.7 million, with no outstanding borrowings under the $100 million revolving credit facility[13]. - Net cash provided by operating activities was $39.9 million, and free cash flow was $7.6 million in Q1 2025[14]. - Free cash flow for Q1 2025 was $7,595 thousand, an increase from $3,781 thousand in Q1 2024[31]. - The company reported a net cash provided by operating activities of $39,865 thousand in Q1 2025, compared to $56,559 thousand in Q1 2024[31]. - Cash and cash equivalents at the end of Q1 2025 were $326,724 thousand, slightly up from $325,975 thousand at the end of 2024[26]. Expenses and Costs - Cost of revenues decreased by 3% to $243.9 million, contributing to improved operating income[9]. - Selling, general and administrative expenses rose to $42.5 million, representing 12.8% of revenues, an increase of 50 basis points[10]. - Capital expenditures in Q1 2025 were $32,270 thousand, down from $52,778 thousand in Q1 2024[26]. Acquisitions and Market Activity - The company completed the acquisition of Pintail Completions on April 1, 2025, which generated over $400 million in revenues in 2024[5]. - The average U.S. rig count increased by 0.3% to 588 in Q1 2025, while oil prices rose by 1.9% to $71.93 per barrel[7]. Assets and Liabilities - Total assets decreased to $1,345,919 thousand as of March 31, 2025, down from $1,386,489 thousand at the end of 2024[25]. - Total liabilities decreased to $264,333 thousand as of March 31, 2025, compared to $308,198 thousand at the end of 2024[25]. Dividends - The company declared a regular quarterly cash dividend of $0.04 per share, payable on June 10, 2025[15].

Core Viewpoint - RPC, Inc. reported its first quarter 2025 results, highlighting a stable performance across most service lines and the successful acquisition of Pintail Completions, which is expected to enhance RPC's service offerings in the Permian region [4][6]. Financial Performance - Revenues for Q1 2025 were $332.9 million, a decrease of 1% from Q4 2024, with pressure pumping revenues remaining flat and other service lines combined decreasing by 1% [6][14]. - Net income was $12 million, down 6% sequentially, with diluted EPS at $0.06, reflecting a decrease in net income margin to 3.6% [10][11]. - EBITDA increased by 6% sequentially to $48.9 million, with an EBITDA margin of 14.7%, up 100 basis points from the previous quarter [11][12]. Acquisition Details - The acquisition of Pintail Completions, effective April 1, 2025, is expected to bring significant operational benefits, as Pintail generated over $400 million in revenues in 2024 and is recognized for its strong profitability and customer service [6][12]. Industry Context - The U.S. rig count averaged 588 in Q1 2025, a slight increase of 0.3% from Q4 2024, but down 5.6% year-over-year [5]. - Oil prices averaged $71.93 per barrel, a 1.9% increase from the previous quarter but a 7.1% decrease compared to the same quarter last year [5]. - Natural gas prices saw a significant increase of 70.4% sequentially, averaging $4.14 per Mcf [5]. Cost Management - Cost of revenues decreased by 3% to $243.9 million, contributing to improved operating income, primarily due to reduced fleet and transportation costs [8][10]. - Selling, general and administrative expenses rose to $42.5 million, reflecting increased IT system implementation costs [9][10]. Cash Flow and Capital Allocation - Net cash provided by operating activities was $39.9 million, with free cash flow at $7.6 million for Q1 2025 [13][30]. - The company declared a quarterly cash dividend of $0.04 per share, payable on June 10, 2025 [13].

Core Points - RPC, Inc. will release its financial results for Q1 2025 on April 24, 2025, before market opens [1] - A conference call to discuss the financial and operating results will take place on the same day at 9:00 a.m. Eastern Time [1] - The company provides specialized oilfield services and equipment primarily to independent and major oilfield companies in the U.S. and selected international markets [3] Conference Call Details - Participants can join the conference call by dialing toll-free (888) 440-5966 or (646) 960-0125 for international callers, using conference ID number 9842359 [2] - The call will also be broadcast and archived for 90 days on the company's investor website for those unable to join by telephone [2] - Interested parties are encouraged to access the webcast link 10-15 minutes prior to the start of the call [2]