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Sep 30, 2022
Dril-Quip Q3 2022 Earnings Report
Reported a decrease in revenue due to foreign exchange impacts and supply chain delays, but net income increased due to the gain on sale of the Houston forge facility.
Key Takeaways
Dril-Quip reported revenue of $88.1 million, a decrease from the previous quarter. Net income was $15.2 million, or $0.45 earnings per share, an increase compared to the second quarter of 2022. The company closed on the sale of the Houston forge facility during the third quarter, driving a net gain on sale of $17.3 million.
Revenue was $88.1 million, down $5.8 million from the second quarter of 2022.
Net income was $15.2 million, or $0.45 earnings per share, an increase of $20.8 million compared to the second quarter of 2022.
Adjusted EBITDA was $7.0 million, or 8.0% of revenue, a decrease of $2.3 million from the second quarter of 2022.
Booked $75.0 million of gross new orders during the third quarter of 2022.
Revenue by Segment
Forward Guidance
The company expects full year bookings to grow 15% to 20% compared to 2021. Incremental adjusted EBITDA margins are expected to be in the 30% - 40% range for the full year 2022. Free cash flow margin target is revised to be break-even for the full year 2022.
Positive Outlook
- Full year bookings are expected to grow 15% to 20% compared to 2021
- Incremental adjusted EBITDA margins are expected to be in the 30% - 40% range for the full year 2022.
- Leading indicators such as tender volume and average quote value have recovered to pre-pandemic levels.
- Strategic moves related to the organization, footprint, and investment in manufacturing this year will benefit the company in years to come.
- Order trends will continue to accelerate into next year led by activity growth in markets such as Brazil, Middle East and the North Sea across all product and service lines.
Challenges Ahead
- Free cash flow margin target is revised to be break-even for the full year 2022 due to increased working capital investment in stocking programs to secure forging supplies.
- Experienced foreign exchange rate headwinds in the period.
Revenue & Expenses
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Historical Earnings Impact
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Avg. Return Before/After Earnings
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