This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

What's Driving RPC, Inc. (RES) Into a Ditch on Wednesday?

NEW YORK (TheStreet) -- Oilfield services provider RPC, Inc. (RES - Get Report) was trading sharply lower on Wednesday after missing fourth-quarter estimates on its bottom line. The stock had unloaded 6.4% to $17.63 by midafternoon.

Revenue for the December-ended quarter totaled $487 million, a 3.6% increase over the year prior, and $6 million higher than analysts polled by Thomson Reuters had forecast. The Atlanta-based company said increased sales were due to higher activity in its major service lines and a larger fleet of revenue-generating equipment.

Net income fell below expectations with earnings of 17 cents a share 34% lower than a year earlier and missing consensus by a nickel.

Hampering profitability, the company's cost of revenues over the quarter was $318.9 million or 65.5% of total sales, compared to $279.4 million or 59.5% of sales last year. The increase was primarily a result of higher material and supplies expenses and increasingly competitive pricing. Gross margin fell to 34.51% from 38.77% in the third quarter and 40.54% in the year-ago period.

Must Read: Why Horizon Pharma (HZNP) Is Up Today

Over fiscal 2013, sales of $1.86 billion were 4.3% lower than a year earlier. Earnings of 77 cents a share fell seven cents short of consensus and came in 39% lower than fiscal 2012.

"Continued competitive pricing and the transition from our remaining contractual work to the spot market served to depress our operating margin compared to the prior quarter and prior year," explained CEO Richard A. Hubbell in a statement.

"The current conditions in the U.S. domestic market continue to be characterized by a large number of service companies competing for long-duration, service-intensive completion work."

The board approved a quarterly dividend of 10.5 cents a share, a 5% increase from its prior dividend, payable on March 10 to shareholders of record on Feb. 10.

TheStreet Ratings team rates RPC INC as a Buy with a ratings score of B+. The team has this to say about their recommendation:

"We rate RPC INC (RES) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
RES $12.67 0.00%
AAPL $94.99 0.00%
FB $99.54 0.00%
GOOG $678.11 0.00%
TSLA $148.25 0.00%


Chart of I:DJI
DOW 16,014.38 -12.67 -0.08%
S&P 500 1,852.21 -1.23 -0.07%
NASDAQ 4,268.7630 -14.99 -0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs