Dril-Quip Inc. DRQ, the manufacturer of offshore drilling and production equipment, reported second-quarter 2015 adjusted earnings of $1.24 per share, beating the Zacks Consensus Estimate of $1.21. Quarterly earnings, however, decreased from $1.27 reported a year ago.
The reported results were unfavorably impacted by an after-tax foreign exchange loss of $8.8 million, or 23 cents per diluted share, as compared to an after-tax foreign exchange loss of $1.5 million, or 4 cents per diluted share, during the second quarter of 2014.
The company registered total revenue of $215.3 million in the quarter, down from the year-ago level of $230.3 million. Also, the reported figure came in below the Zacks Consensus Estimate of $228.0 million.
Operating income fell 23.7% to approximately $52.6 million from the year-earlier level of almost $69.0 million.
On the cost front, selling, general and administrative expenses rose 31.8% to approximately $33.6 million from the year-earlier level of $25.5 million. Engineering and product development costs increased 5.1% year over year.
Backlog
As of Jun 30, 2015, the company had a backlog of $1.0 billion compared with its Jun 30, 2014 backlog of approximately $1.3 billion and its Dec 31, 2014 backlog of approximately $1.2 billion.
Guidance
For the third quarter of 2015, Dril-Quip expects earnings between $1.10 and $1.20 per diluted share, excluding any unusual or special charges. Additionally, based on the current market conditions, the company reiterated its full-year adjusted earnings per share guidance of $4.60–$4.80.
Zacks Rank
Currently, Dril-Quip carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the same sector are Linn Energy, LLC LINE, Gulfmark Offshore, Inc. GLF and Cheniere Energy, Inc. LNG. All these stocks sport a Zacks Rank #1 (Strong Buy).
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