Oil States International ((OIS)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call from Oil States International showcased a cautiously optimistic outlook for the company, marked by significant growth in international and offshore operations. Despite challenges in US land-driven operations and certain segments, the company remains focused on long-term strategic goals and positive cash flow generation, which signals strong positioning for future growth.
International and Offshore Revenue Growth
International and offshore revenues now make up 72% of Oil States International’s consolidated revenues for Q4 2024. This growth was driven by strong demand and strategic optimization of US land-driven business, positioning the company favorably in the global market.
Successful Sale of Idled Facility
The company completed the sale of a previously idled facility, netting cash proceeds of $24.8 million and achieving a pre-tax gain of $15.3 million. This transaction has positively impacted the company’s financial position.
Shareholder Returns and Cash Flow Generation
Oil States International reported generating $18 million in cash flows from operations and repurchased $9 million of common stock in Q4 2024. The company expects strong free cash flow in 2025, which will support further shareholder returns.
Offshore Manufactured Product Segment Growth
This segment experienced a 5% sequential growth, generating $107 million in revenues and an adjusted segment EBITDA of $25 million, with a robust margin of 23% in Q4 2024, highlighting its strength within the company’s portfolio.
Positive Market Momentum and Strategic Investments
Oil States International is experiencing positive market momentum due to strong capital investments in offshore and international projects. This is driven by global power demand and recent FIDs, with promising prospects for managed pressure drilling systems and other advanced technologies.
Decline in US Land-Driven Operations
The company faced challenges in its US land-driven operations due to a declining frac spread count, which negatively affected revenues in Q4 2024, underscoring a key area of concern for the company.
Completion and Production Services Segment Challenges
The completion and production services segment saw revenues decline by 5% sequentially, with a drop in adjusted segment EBITDA margin from 13% in Q3 to 12% in Q4 2024, indicating challenges that need addressing.
Downhole Technology Segment Performance
The downhole technology segment reported revenues of $27 million with breakeven adjusted segment EBITDA for Q4 2024, reflecting underperformance compared to other segments.
Forward-Looking Guidance
Looking ahead, Oil States International has provided detailed guidance for 2025. The company expects full-year revenues between $700 and $735 million and EBITDA between $88 and $93 million. Q1 revenues are projected to be between $160 and $170 million, with EBITDA between $17.5 and $18.5 million. The company also anticipates cash flows from operations in the range of $65 to $75 million for 2025, with planned capital expenditures of approximately $25 million. Key focus areas include optimizing global operations, enhancing profitability in completion and production services, and leveraging new technology introductions.
In summary, Oil States International’s earnings call reflects a cautiously optimistic outlook, with strong international and offshore growth, successful strategic initiatives, and a focus on long-term goals. Despite challenges in US operations, the company is well-positioned for future growth, supported by positive cash flow and strategic investments.