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Mar 31, 2020
Rpc Q1 2020 Earnings Report
Announced first quarter 2020 financial results, reflecting lower revenues and operating loss due to decreased activity and pricing.
Key Takeaways
RPC Inc. reported a decrease in revenues and a significant operating loss for the first quarter of 2020, driven by lower activity levels, pricing pressures, and impairment charges. The company is implementing cost reduction measures to address the downturn.
Revenues decreased by 27.2% compared to the first quarter of 2019 due to lower activity levels and pricing.
Operating loss was $218.7 million, compared to an operating loss of $2.2 million in the same period of the prior year.
Net loss was $160.4 million, or $0.76 loss per share, compared to a net loss of $739 thousand, or $0.00 per share, in the first quarter of 2019.
The company ended the quarter with $82.6 million in cash and a debt-free balance sheet and is reducing capital expenditures.
Rpc
Rpc
Forward Guidance
RPC is focused on managing costs and adjusting its operations in response to the downturn in the oilfield services market. The company has reduced its workforce, adjusted compensation, lowered expenses, and decreased capital expenditures to endure the downturn.
Positive Outlook
- Implemented strict procedures to ensure the health and safety of employees, customers, and vendors.
- Streamlined operations, including a smaller geographic footprint.
- Made progress in pressure pumping, with efficient operations for several high-utilization customers.
- Ended the first quarter with $82.6 million in cash and a debt-free balance sheet.
- Projected 2020 capital expenditures will be approximately $50 million, down from a prior forecast of approximately $80 million.
Challenges Ahead
- Customers began to cancel current and scheduled drilling and completion activities.
- The domestic rig count began to decline precipitously.
- Oilfield operators announced significant capital expenditure reductions.
- The oilfield is being impacted by both an increase in oil production and a severe decrease in demand.
- Reduced workforce, instituted compensation adjustments, lowered expense structure, and decreased capital expenditures.