Dril-Quip’s third quarter revenues fall below forecasts

Dril-Quip, Inc., an oilfield services company headquartered in Houston, reported net income of $50.8 million for the three months ended September 30, 2015, versus net income of $55.7 million for the third quarter of 2014.

The company said its third quarter 2015 results were favorably impacted by an after-tax foreign exchange gain of $5.1 million, as compared to an after-tax foreign exchange gain of $3.1 million during the third quarter of 2014. According to the company, total revenues were $201.4 million during the quarter ended September 30, 2015, compared to $241.7 million for the same period in 2014.

For the nine months ended September 30, 2015, net income was $143.7 million, compared with net income of $149.6 million for the same period in 2014.

Dril-Quip says its results for the first nine months of 2015 were favorably impacted by an after-tax foreign exchange gain of $860,000, as compared to an after-tax foreign exchange gain of $800,000 during the first three quarters of 2014. The company reported total revenues to be $642.7 million during the nine months ended September 30, 2015, compared to $676.1 million during the same period in 2014.

Backlog hit by order cancelations

In addition, the company announced that its backlog at September 30, 2015, was $824 million, compared to its June 30, 2015, backlog of $974 million and its September 30, 2014, backlog of approximately $1.25 billion.

Dril-Quip said that its backlog balance during the third quarter 2015 was negatively impacted by purchase order cancelations and revisions totaling approximately $23 million and currency translation adjustments of approximately $13 million due primarily to the strengthening of the U.S. dollar versus the Brazilian real.

Blake DeBerry, Dril-Quip’s President and CEO, said: “Despite the fact that third quarter 2015 revenues fell below forecasts, we were pleased that our gross margins exceeded expectations and allowed us to achieve diluted earnings per share at the upper range of our guidance.

“Even though declining oil prices and continuing difficult market conditions have resulted in depressed booking levels, we continue to believe that our strong balance sheet and free cash flow will allow us to enhance long-term shareholder value.”

Outlook

Based upon current market conditions and excluding foreign currency gains/losses or any unusual items, the company says it expects its earnings per diluted share for the quarter ending December 31, 2015, to approximate $1.00 to $1.10 per share. Dril-Quip adds that it expects its full-year 2015 earnings per diluted share to be in the range of $4.70 to $4.80, excluding foreign currency gains/losses or any unusual items.

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