NEW YORK (TheStreet) -- Oilfield services provider RPC, Inc. (RES) 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.
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."