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Mar 31, 2020
Oil States Q1 2020 Earnings Report
Reported a net loss due to significant items, but operational activity exceeded guidance excluding impairments.
Key Takeaways
Oil States International reported a net loss of $405.0 million, or $6.79 per share, on revenues of $219.7 million for the first quarter of 2020. The results were impacted by significant non-cash impairment charges. Despite these charges, the company's operational activity exceeded guidance, particularly in Completion Services and Downhole Technologies segments.
Net loss for Q1 2020 was $405.0 million, or $6.79 per share, including $396.8 million after-tax of significant items.
Q1 revenues reached $219.7 million.
Completion Services revenues modestly increased sequentially with improved EBITDA margins.
Downhole Technologies revenues improved 7% sequentially with increased EBITDA margins.
Revenue by Segment
Forward Guidance
Oil States anticipates challenging market conditions for the remainder of 2020 and into 2021, focusing on liquidity preservation and cost management. They are amending their revolving credit facility to an asset-based lending arrangement and taking actions to adjust to declining revenues.
Positive Outlook
- Working with lenders to amend the revolving credit facility into an asset-based lending arrangement.
- Taking significant cost reduction actions to adjust to declining revenues.
- Closely managing debt, working capital, and cash flow generation.
- Expects to complete the amendment process in the second quarter of 2020.
- Believes it will have sufficient liquidity over the next twelve months to fund its liabilities.
Challenges Ahead
- Anticipates challenging market conditions for the remainder of 2020 and into 2021.
- Operational activity across U.S. land-based businesses is declining quickly in the second quarter.
- Expects to fail to comply with the total net leverage ratio covenant in the third quarter of 2020 due to projected declines in consolidated EBITDA.
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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