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RPC (RES) Q2 Earnings call transcript Jul 25, 2024

AInvestFriday, Jul 26, 2024 3:40 pm ET
1min read

RPC, Inc. recently held its second quarter 2024 earnings call, offering insights into the company's performance and outlook. The call was led by Ben Palmer, President and CEO, and Mike Schmit, Chief Financial Officer. Despite facing challenges in the pressure pumping sector, RPC reported solid results in its non-pressure pumping areas, demonstrating the company's diversified portfolio of services and customers.

Financial Performance

RPC's second-quarter revenue decreased by 4% to $364 million, with pressure pumping down 17%. However, the company's EBITDA grew sequentially, highlighting its operational efficiency and cost control measures. The company's total revenues were primarily driven by its Technical Services segment, which accounted for 94% of the total revenue. Operating cash flow for the quarter stood at $127.9 million, with a free cash flow of $52.9 million, reflecting the company's strong financial position.

Strategic Outlook

RPC is exploring opportunities for strategic investments in its business, with a focus on upgrading its frac fleet and acquisitions in non-pressure pumping service lines. The company is considering M&A opportunities that are accretive from a cash flow and earnings valuation perspective. RPC is also confident in its ability to compete successfully in the electric fleet market as technology and customer preferences evolve.

Market Dynamics

The pressure pumping market remains highly competitive, with RPC facing challenges from frac crews moving into oily basins and increased competition from both smaller and larger peers. The company is adopting a disciplined approach, focusing on quality services and efficiency, while maintaining a balance between volume and profitability. RPC is also closely monitoring oil activity levels, anticipating that demand-supply balance will play a crucial role in restarting drilling and completion activity in the U.S. market.

Conclusion

RPC, Inc.'s second-quarter earnings call provided a comprehensive update on the company's performance and strategic outlook. Despite facing challenges in the pressure pumping sector, the company's non-pressure pumping areas performed solidly, underscoring the strength of its diverse portfolio of services and customers. RPC's focus on operational efficiency, cost control, and strategic investments positions it well to navigate the current market dynamics and capitalize on future opportunities.

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