Archrock Q4 Earnings Beat Estimates on Strong Gas Compression Demand

Archrock Inc. AROC reported fourth-quarter 2025 earnings per share of 69 cents, which beat the Zacks Consensus Estimate of 40 cents. The bottom line improved from the year-ago quarter’s level of 35 cents.

This Houston, TX-based oil and gas equipment and services company generated total quarterly revenues of $377 million, up from $326 million reported in the year-ago quarter. The figure met the Zacks Consensus Estimate.

The strong quarterly earnings were driven by solid contributions from both operating segments, reflecting robust demand for natural gas compression services.

Archrock, Inc. Price, Consensus and EPS Surprise

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

AROC’s Operational Performance

Archrock operates through two business segments: Contract Operations and Aftermarket Services.

The Contract Operations segment reported revenues of $327.1 million in the fourth quarter compared with $286.5 million in the year-ago quarter.

Total operating horsepower at the end of the quarter was 4.6 million, up from 4.2 million in the prior-year quarter. The company’s utilization rate at the end of the fourth quarter of 2025 stood at 95.5%, lower than 96.1% at the end of the prior-year quarter.

Revenues from the Aftermarket Services segment totaled $50 million compared with $40 million in the fourth quarter of 2024.

Archrock’s Costs and Expenses

The total cost of sales in the quarter amounted to $108.5 million, down from $117.1 million in the year-ago period. Depreciation and amortization expenses totaled $68.9 million in the quarter under review.

AROC’s Liquidity Position & Capital Expenditure

As of Dec. 31, 2025, the company had a long-term debt of $2.4 billion. The total available liquidity was $579 million as of the same date. Net capital expenditures amounted to $9.5 million in the fourth quarter.

AROC’s Dividend Hike

Archrock declared a quarterly dividend of 22 cents per share (88 cents on an annualized basis), representing a sequential increase of approximately 5%. This resulted in a dividend coverage of 4.9x in the quarter. The dividend was paid on Feb. 18, 2025.

AROC’s Share Repurchase Details

During the fourth quarter, the company repurchased 647,480 shares of common stock at an average price of $24.44 per share for a total consideration of approximately $15.8 million. From April 2023 through Oct. 22, 2025, a total of 4,461,311 shares were repurchased at an average price of $20.72 per share. Archrock’s available repurchase capacity at the end of the fourth quarter stood at $117.7 million.

AROC’s 2026 Guidance

The company expects a solid 2026 performance, projecting net income between $306 million and $356 million and adjusted EBITDA in the range of $865 million to $915 million. Archrock anticipates Contract Operations revenues for 2026 to range from $1.32 billion to $1.36 billion. The Aftermarket Services business is expected to generate revenues between $200 million and $220 million.

On the investment side, the company expects growth capital expenditures between $250 million and $275 million, while maintenance capital spending is projected at $125-$135 million.

AROC’s Zacks Rank and Other Key Picks

AROC currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks from the energy sector are TechnipFMC plc FTI and Oceaneering International OII. While TechnipFMC sports a Zacks Rank #1, Oceaneering carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The company ended the year with a strong backlog of $16.6 billion, providing revenue visibility. FTI prioritizes rewarding its investors, having returned $1 billion to shareholders in 2025.

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.

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

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