Cactus Beats on Q1 Earnings and Revenues, Lowers '25 Capex View

Cactus, Inc. WHD reported first-quarter 2025 adjusted earnings of 73 cents per share, which beat the Zacks Consensus Estimate of 70 cents. However, the bottom line declined from the year-ago quarter’s figure of 75 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Total quarterly revenues of $280.3 million beat the Zacks Consensus Estimate of $268 million. The top line improved from the year-ago figure of $274 million.

The better-than-expected quarterly earnings can be attributed to increased revenues from the Pressure Control segment, partially offset by lower contributions from the Spoolabe Technologies segment.

Cactus, Inc. Price, Consensus and EPS Surprise

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

Business Segments

Following the closure of the FlexSteel acquisition, Cactus started reporting under two business segments — Pressure Control and Spoolable Technologies.

WHD generated revenues of $190.3 million from the Pressure Control segment, up from $175 million reported in the year-ago quarter. The segment was aided by increased sales of wellhead and production-related equipment due to better customer drilling efficiencies. The top line was above our estimate of $178.6 million.

Adjusted Segment EBITDA for Pressure Control totaled $64.8 million, up from $60.6 million in the prior-year quarter. The reported figure beat our estimate of $59.7 million.

Revenues from the Spoolable Technologies segment totaled $92.6 million, down from $99.1 million in the prior-year quarter. The figure beat our estimate of $90.2 million. The segment was affected due to reduced customer activity levels in the seasonally slow first quarter. 

Adjusted Segment EBITDA for the unit totaled $33.5 million, down from $38.8 million a year ago. The figure beat our estimate of $32.3 million.

Capex and Cash Flow

Cactus’ capital expenditure and other amount for the quarter totaled $15.5 million. Operating cash flow totaled $41.5 million.

Balance Sheet

Cactus had cash and cash equivalents of $347.7 million at the end of the first quarter of 2025. The company had no bank debt outstanding as of March 31, 2025.

Outlook

WHD expects U.S. land rig count in the second quarter of 2025 to decline due to budget resets amid lower commodity prices, with modest revenue drops in Pressure Control and seasonal growth in Spoolable Technologies.

For full-year 2025, WHD expects net capital expenditures to be in the range of $40-$50 million, down from the previously guided range of $45-$55 million.

Zacks Rank and Key Picks

Currently, WHD carries a Zacks Rank #4 (Sell).

Investors interested in the energy sector may look at some better-ranked stocks like Archrock Inc. AROC, Kinder Morgan, Inc. KMI and Enterprise Products Partners L.P. EPD. While Archrock presently sports a Zacks Rank #1 (Strong Buy), Kinder Morgan and Enterprise Products carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. AROC provides natural gas contract compression services and generates stable fee-based revenues.

Archrock’s earnings beat estimates in three of the trailing four quarters and met once, delivering an average surprise of 8.81%.

Kinder Morgan is a leading midstream player in North America with a stable and resilient business model, largely driven by take-or-pay contracts, which ensure consistent earnings and facilitate reliable capital returns to shareholders. KMI operates one of the largest natural gas pipeline networks, positioning it to benefit from the projected increase in U.S. natural gas demand by 2030. 

Kinder Morgan’s earnings missed estimates in three of the trailing four quarters and met once, delivering an average negative surprise of 3.33%.

Enterprise generates stable fee-based revenues from its vast network of oil and gas pipelines spanning 50,000 miles, connecting prolific U.S. shale plays. Notably, the acquisition of Pinon Midstream, which aims to provide services in the prolific Permian Basin, is expected to drive the partnership’s cash flows. This move enhances its NGL value chain and addresses regional infrastructure constraints, with strong customer demand expected to boost revenues.

EPD’s earnings beat estimates in one of the trailing four quarters and missed in the other three, delivering an average negative surprise of 0.77%.

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

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