RPC Plunges 9.7% on Q2 Earnings Disappointment—What’s Fueling the Selloff?

Summary
• RPC (RES) shares nose-dived 9.7% to $4.515 at 1:44 PM ET, erasing nearly $150 million in market value.
• Earnings miss: Adjusted EPS of $0.08 fell short of $0.09 estimates, with pressure pumping revenue down 18% sequentially.
• Intraday range: $4.385–$4.645, with volume surging 0.48% of float.
• Analysts now project Q3 revenue of $436.76M vs. $425.29M consensus—will RPC’s Permian acquisition offset weakness?

Q2 Earnings Miss Sparks Investor Exodus
RPC’s 9.7% intraday collapse stems from a Q2 earnings report that missed estimates on both revenue and adjusted EPS. Despite a 26% sequential revenue boost from the Pintail acquisition, pressure pumping—a 18% decline—dragged performance. Adjusted EPS of $0.08 lagged the $0.09 consensus, while GAAP EPS slumped to $0.05 from $0.15 a year ago. Management cited pricing pressures, weather disruptions, and customer delays in pressure pumping, a core service line. The stock’s sharp drop reflects investor skepticism about RPC’s ability to offset these headwinds despite $162M in cash and a $0.04 dividend.

Oilfield Services Sector Struggles Amid Commodity Woes
The broader oilfield services sector remains under pressure as WTI crude trades near $64.74/barrel (-10% YOY). Schlumberger (SLB), the sector’s bellwether, fell 0.7% intraday, mirroring RPC’s earnings-driven weakness. With U.S. rig counts averaging 571 (-5.3% QOQ), demand for RPC’s pressure pumping and coiled tubing services remains constrained. While Pintail’s $98.9M contribution brightened the revenue outlook, RPC’s 15.6% adjusted EBITDA margin still trails peers like Halliburton (HAL), which reported 22% margins in Q2.

Bearish Options Play and Technical Downtrend Setup
• Key Technicals:
- RSI: 45.4 (neutral to bearish)
- MACD: -0.021 (bearish momentum)
- 200D MA: $5.59 (current price at 4.515 is 20% below)
- Bollinger Bands: Price at $4.458 (lower band) suggests oversold conditions
- Support/Resistance: 30D support at $4.74 vs. 200D resistance at $6.12
• Trading Setup: A short-term bearish bias is reinforced by the RSI’s 45.4 level and MACD’s negative crossover. The 52W low of $4.10 is now within reach if the 200D MA breaks. While no leveraged ETFs are available, the $4.458 support level could trigger a bounce if buyers step in.
• Top Options:
- RES20250815P5 (Put):
• Strike: $5, Expiry: 8/15, IV: 67.02%, Delta: -0.687, Theta: -0.0029, Gamma: 0.462
• Payoff (5% downside): $0.22/share (4.9% return on $5 strike)
• Why: High leverage (7.56%) and gamma sensitivity make this ideal for a 5% drop in RPC.
- RES20251219P5 (Put):
• Strike: $5, Expiry: 12/19, IV: 34.15%, Delta: -0.615, Theta: -0.0008, Gamma: 0.379
• Payoff (5% downside): $0.22/share (4.4% return on $5 strike)
• Why: Lower IV but strong gamma for a long-term bearish play.
• Hook: If $4.458 support breaks, RES20250815P5 offers a high-conviction short-side play.

Backtest RPC Stock Performance
The Resilience ETF (RES) has historically shown mixed performance after experiencing a significant intraday plunge of -10% or more. The backtest data reveals that the 3-day win rate is 47.24%, the 10-day win rate is 45.83%, and the 30-day win rate is 43.46%. This suggests that while the ETF has a decent chance of recovering some losses in the short term, the overall trend points to negative returns, with a maximum return of only -0.04% observed over the 30-day period.

RPC’s Downward Momentum Pours Cold Water on Permian Hopes
RPC’s 9.7% selloff underscores the fragility of its business model in a low-commodity environment. While the Pintail acquisition added $98.9M in revenue, pressure pumping’s 18% sequential drop and 15.6% adjusted EBITDA margin (vs. 22% at peers) highlight operational challenges. Technically, the 200D MA at $5.59 acts as a critical resistance; a break below $4.458 could trigger a retest of the 52W low at $4.10. Investors should monitor Schlumberger (SLB, -0.7%) as a sector barometer. For now, bearish options like RES20250815P5 and a watch on $4.458 support are the priority.