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Sep 30, 2021
Dril-Quip Q3 2021 Earnings Report
Reported operational and financial results, showing increased revenue due to aftermarket activity, a net loss, and positive free cash flow.
Key Takeaways
Dril-Quip reported Q3 2021 results with increased revenue to $83.0 million driven by higher aftermarket activity in the Western Hemisphere. The company recorded a net loss of $11.1 million, or $0.31 per share, and an adjusted EBITDA of $4.0 million, or 4.8% of revenue. They generated net cash from operating activities of $9.3 million and free cash flow of $7.0 million, representing 8.5% of revenue.
Revenue increased to $83.0 million due to higher aftermarket activity in the Western Hemisphere.
Net loss was $11.1 million, or $0.31 per share, improving from the previous quarter.
Adjusted EBITDA was $4.0 million, or 4.8% of revenue, driven by improved aftermarket and downhole tools activity.
Net cash from operating activities was $9.3 million, and free cash flow was $7.0 million, or 8.5% of revenue.
Revenue by Segment
Forward Guidance
Dril-Quip anticipates Q4 bookings to be at the high end of their $40 to $60 million range and they expect that the larger integrated oil companies will begin to look at placing new orders in the back half of 2022 should commodity prices continue to remain at or near current levels.
Positive Outlook
- Indications of increased activity by independent exploration and production customers.
- Customers are getting back to work and consuming their inventory.
- Anticipated Q4 bookings at the high end of $40 to $60 million range.
- Larger integrated oil companies may place new orders in the back half of 2022 if commodity prices remain stable.
- Strategic growth pillars are setting the foundation to outperform the market in a recovery.
Challenges Ahead
- Product orders have not yet resumed to pre-pandemic levels.
- Increased pressure on product revenue and margins due to customer and product mix.
- Uncertainty of some customer plans as they formalize budget plans for 2022.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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