Tidewater 2025 Q1 Earnings Misses Targets as Net Income Falls 9.5%

Tidewater (TDW) reported its fiscal 2025 Q1 earnings on May 05th, 2025. Tidewater's first-quarter results revealed a revenue of $333.44 million, surpassing analyst estimates and marking a 3.8% year-over-year increase. However, net income decreased by 9.5%, falling short of expectations. The company maintained its revenue guidance for the year, projecting between $1.32 billion and $1.38 billion, aligning with previous forecasts. Despite the decline in net income, Tidewater's solid revenue performance highlights its strategic positioning in the offshore energy sector.

Revenue
Tidewater's revenue for the first quarter reached $333.44 million, marking a 3.8% increase compared to the previous year. Vessel revenues contributed significantly to this growth, amounting to $330.70 million, while other operating revenues added $2.75 million.

Earnings/Net Income
Tidewater's EPS declined by 7.8% to $0.83 in 2025 Q1, compared to $0.90 in 2024 Q1. The company's net income also decreased to $42.32 million, representing a 9.5% drop from $46.74 million in the previous year. The lower EPS indicates a challenging quarter for Tidewater's financial performance.

Price Action
The stock price of Tidewater edged up 1.06% during the latest trading day, climbed 3.91% during the most recent full trading week, and tumbled 12.24% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing Tidewater (TDW) shares after earnings release and holding them for 30 days has yielded a 20.44% return over the past five years. This performance significantly underperformed the benchmark's 85.86% return. The strategy's low Sharpe ratio of 0.08 indicates poor risk-adjusted returns, and it experienced a maximum drawdown of -55.41%, emphasizing its high risk profile. This underscores the importance of risk management when investing in Tidewater. Despite the company's challenges, its positioning in the offshore energy sector offers potential for growth. Investors should remain cautious and consider diversification strategies to mitigate risks associated with significant drawdowns.

CEO Commentary
Quintin Kneen, President and Chief Executive Officer of Tidewater, remarked that the first quarter of 2025 surpassed expectations, driven by strong utilization and day rates, resulting in revenue of $333.4 million. The average day rate reached a record $22,303, contributing to a gross margin of 50.1%, exceeding projections for the second consecutive quarter. Kneen highlighted the significant free cash flow of $94.7 million, especially given the high drydock expenditure typical of the first quarter. He emphasized the impact of share repurchases, stating that nearly $100 million was used to reduce outstanding shares, and noted the ongoing vigilance concerning macroeconomic uncertainties affecting offshore activity.

Guidance
Tidewater reaffirms its 2025 revenue guidance of $1.32 billion to $1.38 billion, alongside gross margin expectations of 48% to 50%. Kneen indicated that the midpoint of the revenue guidance increased from 81% to 88% contracted or completed work as of now. While acknowledging increased macroeconomic uncertainty, he stressed that there have been no project cancellations thus far, and remains optimistic about the company’s positioning to benefit from growing offshore energy demand.

Additional News
In recent developments, Tidewater Inc has undertaken a strategic share repurchase program, utilizing nearly $100 million to reduce outstanding shares, enhancing shareholder value. This move underscores Tidewater's commitment to returning value to investors amidst challenging market conditions. Additionally, Tidewater has reaffirmed its revenue guidance for FY2025, projecting between $1.32 billion and $1.38 billion. This alignment with previous forecasts demonstrates the company's confidence in its operational stability. Furthermore, Tidewater's leadership remains vigilant regarding macroeconomic uncertainties affecting offshore activity, emphasizing a cautious yet optimistic outlook for future growth in the offshore energy sector.