RES Q4 Earnings Miss Estimates on Higher Costs, Revenues Rise Y/Y

RPC Inc. RES reported fourth-quarter 2025 adjusted earnings of 4 cents per share, which missed the Zacks Consensus Estimate of 7 cents. The bottom line also declined from the year-ago quarter’s level of 6 cents.

Total quarterly revenues were $426 million, up from the year-ago quarter’s $335 million. The top line beat the Zacks Consensus Estimate of $425 million.

The weak quarterly earnings can be attributed to a higher cost of revenues, primarily due to a change in accounting treatment for wireline cable to expensing, which was previously capitalized, and reduced customer activity, mainly in December. However, contributions from the Pintail Completions acquisition partially offset the negatives. 

RPC, Inc. Price, Consensus and EPS Surprise

RPC, Inc. price-consensus-eps-surprise-chart | RPC, Inc. Quote

Segmental Performance

Operating profit in the Technical Services segment totaled $8.5 million, lower than the year-ago quarter’s $10.6 million. The decline includes the impact of a change in the accounting treatment of wireline cables from capitalization to expensing in the quarter. The segment was also affected by weakness in downhole tools in the international markets and the Rocky Mountain region.

Operating profit in the Support Services segment amounted to $1.7 million, lower than the year-ago level of $2.6 million. The segment was mainly affected by decreased activity in rental tools, mainly in December, driven by lower customer activity.

The company’s total operating loss in the quarter was $4 million, compared with a profit of $10.5 in the year-ago quarter. The average domestic rig count was 548, down 6.5% year over year.

The average oil price was $59.79 per barrel, down 15.3% year over year. The average price of natural gas was $3.69 per thousand cubic feet, 51.9% higher than the figure recorded in the corresponding period of 2024.

Costs & Expenses

In the fourth quarter, the cost of revenues (excluding depreciation and amortization) increased to $336.6 million from $250.2 million in the prior-year period. Selling, general and administrative expenses amounted to $47.7 million, higher than the year-ago quarter’s $41.2 million.

Financials

RPC’s total capital expenditure for the year was $148.4 million.

As of Dec. 31, 2025, the company had cash and cash equivalents of $210 million and maintained a debt-free balance sheet.

RES’ Zacks Rank and Key Picks

RES currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the energy sector are Oceaneering International OII, W&T Offshore WTI and Archrock Inc. AROC, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading provider of offshore equipment and technology solutions to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.

W&T Offshore benefits from its prolific Gulf of America assets, which offer low decline rates, strong permeability and significant untapped reserves. The company’s recent acquisition of six shallow-water fields in the Gulf of America boosts its production prospects in the future, which is expected to enhance its revenues. 

Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues. With natural gas playing an increasingly important role in the energy transition journey, AROC is expected to witness sustained demand for its services.

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This article originally published on Zacks Investment Research (zacks.com).

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