RPC Profit Rebounds as Margins Recover
Second-quarter revenue reached $460.9 million, rising 9.5% from a year earlier.
RPC, Inc. (RES), the oilfield-services company, reported a second-quarter profit rebound as lower service-delivery costs lifted adjusted EBITDA 23.3% sequentially to $66.0 million and widened its margin 250 basis points to 14.3%.
The margin recovery came as sequential revenue growth slowed to 1%, following a 7% increase in the first quarter and a 5% decline in the final quarter of 2024. The average U.S. rig count edged up 1.1% from the first quarter but remained 3.0% below the prior year, while oil and natural-gas prices moved in opposite directions.
Revenue rose 9.5% from $420.8 million a year earlier. Net income increased 19% to $12.1 million, or $0.05 a share, and the net margin widened to 2.6% from 2.4%. Compared with the first quarter, net income rebounded from $0.9 million, or $0.00 a share.
Adjusted net income climbed sequentially to $17.8 million, or $0.08 a share, from $7.6 million, or $0.03 a share. Cost of revenue fell 2.8% to $345.7 million despite higher sales, as improved job mix, particularly for materials and supplies in Pressure Pumping, offset activity-related costs. Higher professional and advisory fees helped push selling, general and administrative expense up 6.9% to $51.5 million.
Technical Services revenue rose 1% sequentially to $438.1 million, while operating income jumped 73% to $27.6 million. Double-digit revenue increases in Snubbing, Cementing and Downhole Tools were largely offset by lower Pintail Wireline revenue. Technical Services sales were 10.4% higher than a year earlier.
Support Services provided a smaller but faster-growing contribution. Revenue rose 11% sequentially to $22.8 million as Rental Tools sales increased 21% from the seasonally weak first quarter, and operating income climbed to $2.3 million from $0.4 million. The segment’s revenue remained 5.4% below the prior-year period.
Cash generation weakened despite the earnings improvement. Quarterly free cash flow fell 53% from a year earlier to $4.7 million, and first-half free cash flow dropped 79% to $3.8 million as working capital used $42.6 million. Cash declined to $179.5 million from $210.0 million at year-end after RPC made a $20 million principal payment on the Pintail acquisition note, reducing total notes payable to $30 million.
RPC shifted toward a modest increase in capital spending, citing improved pricing and activity visibility while remaining cautious about oil-price volatility. The company also extended its $100 million revolving credit facility through June 2031 and had no borrowings under it during the quarter. Ben Palmer planned to retire as chief executive and leave the board by year-end, with RPC targeting completion of its successor search before then.