Dril-Quip, Inc.’s DRQ shares declined 5.2% since the announcement of weak fourth-quarter results on Feb 25. Market uncertainty owing to the coronavirus pandemic continues to hurt the company’s product bookings and bottom line.
The company reported fourth-quarter 2020 adjusted loss per share of 12 cents, wider than the Zacks Consensus Estimate of a loss of a penny. In the year-ago period, the company reported a profit of 23 cents per share.
It registered total revenues of $87 million for the quarter, lower than $108 million in the year-ago period. Moreover, the figure missed the Zacks Consensus Estimate of $89 million.
DrilQuip, Inc. Price, Consensus and EPS Surprise
DrilQuip, Inc. price-consensus-eps-surprise-chart | DrilQuip, Inc. Quote
Dril-Quip reported product bookings of $36 million for the quarter. The company added that the uncertain business scenario owing to the coronavirus pandemic has hurt its product bookings. Notably, the company recorded fourth-quarter operating loss of $11.6 million, wider than a loss of $2.1 million in the prior-year quarter.
Total Costs and Expenses
On the cost front, cost of sales declined to $64.1 million for the reported quarter from $67.2 million in the year-ago period. Engineering and product development costs, however, rose marginally to $4 million for the quarter from the year-ago figure of $3.9 million. Total cost and expenses for the quarter totaled $98.9 million compared with $93.4 million a year ago.
Free Cash Flow
Dril-Quip’s free cash outflow for the fourth quarter was $18.5 million. For fourth-quarter 2019, the company’s free cash flow was recorded at $5.2 million.
At fourth quarter-end, it had $196 million in backlog, down from $273 million as of Dec 31, 2019.
Dril-Quip recorded $1.7 million capital expenditure for the quarter versus the year-ago level of $1.9 million.
As of Dec 31, 2020, its cash balance was $346 million. It had total available liquidity of $386.2 million. The company’s balance sheet is free of debt load, which highlights a sound financial position.
For 2021, the leading manufacturer of highly engineered drilling and production equipment expects product bookings worth $40 million to $60 million per quarter. In the back half of this year, the company expects to see modest improvement since economies are reopening.
Zacks Rank & Key Picks
Dril-Quip currently carries a Zacks Rank #4 (Sell). Meanwhile, a few better-ranked players in the energy space include Matador Resources Company MTDR, Antero Resources Corporation AR and Diamondback Energy, Inc. FANG. While Antero Resources carries a Zacks Rank #2 (Buy),Diamondback and Matador sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador is likely to see earnings growth of 201.3% in 2021.
Antero Resources has seen upward estimate revisions for 2021 earnings in the past 30 days.
Diamondback is likely to see earnings growth of 55% in 2021.
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