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Sep 30, 2022
TETRA Q3 2022 Earnings Report
Announced third-quarter 2022 financial results, reflecting a mix of revenue growth and seasonal impacts.
Key Takeaways
TETRA Technologies reported third-quarter revenue of $135 million, a 41% increase year-over-year, but a 4% decrease from the previous quarter due to seasonality in the European industrial chemicals business. Net income was break even, while adjusted EBITDA reached $18.6 million, up 24% year-over-year.
Water & Flowback Services revenue increased 15% quarter-on-quarter, driven by differentiated technologies and integrated water management strategy.
Completion Fluids & Products revenue decreased 21% from the second quarter due to seasonal factors, but Adjusted EBITDA margins improved to 24.9%.
The company announced exclusive technology agreements for recycling produced water from oil and gas wells for beneficial re-use.
TETRA completed a maiden inferred bromine and lithium brine resource estimation report, highlighting a significant resource on their Arkansas brine leased acreage.
Forward Guidance
TETRA anticipates continued growth in its core businesses, particularly in the offshore and deepwater markets, and is making strides in its low carbon initiatives, including bromine and lithium resource development.
Positive Outlook
- Stronger activity expected in the North America onshore business.
- Growth in Latin America.
- Continued expansion into battery storage markets.
- Expected profits from bromine and lithium assets.
- Significant value in net income to cash flow conversion from tax loss carryforwards.
Challenges Ahead
- Supply chain challenges persist, especially with certain chemicals and raw materials.
- Inflationary pressures continue to impact margins.
- Supply chain constraint impacting a European supplier is improving but is not yet back to full production levels.
- Key raw material prices in North America are still very inflated.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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