Archrock, Inc. Reports Third Quarter 2024 Financial Results
Archrock, Inc. (NYSE: AROC), a leading provider of natural gas compression services, announced its financial results for the third quarter of 2024.
Key Financial Metrics
| Metrics | Q3 2024 | Q3 2023 | Year-over-Year Change | Consensus Estimate | Comparison to Estimates |
|---|---|---|---|---|---|
| Revenue | $292.2 million | $253.4 million | +15.3% | $286.19 million | Beat |
| Earnings Per Share (EPS) | $0.22 | $0.20 | +10% | $0.27 | Miss |
| Adjusted EPS | $0.28 | $0.20 | +40% | - | - |
| Adjusted EBITDA | $150.9 million | $120.2 million | +25.5% | - | - |
Financial Performance Interpretation: Archrock outperformed revenue expectations, generating $292.2 million against the consensus of $286.19 million, marking a year-over-year increase of over 15%. However, EPS of $0.22 fell short of the expected $0.27. Adjusted EPS showed strong growth, rising by 40%, while adjusted EBITDA increased significantly by 25.5%.
Revenue Performance by Segment
| Segment | Q3 2024 Revenue | Q3 2023 Revenue | Year-over-Year Change |
|---|---|---|---|
| Contract Operations | $245.4 million | $207.6 million | +18% |
| Aftermarket Services | $46.7 million | $45.8 million | +2% |
Segment Performance Interpretation: The Contract Operations segment demonstrated robust growth with an 18% increase, driven by the full utilization of the compression fleet and the acquisition of Total Operations and Production Services, LLC (TOPS). Aftermarket Services grew moderately by 2%, consistent with expectations.
Key Developments and Operational Highlights
- Closed acquisition of Total Operations and Production Services, LLC (TOPS).
- Declared a quarterly dividend of $0.175 per share, a 6% increase from the previous quarter and 13% higher compared to Q3 2023.
- Achieved record-setting adjusted gross margins in contract operations and aftermarket services segments.
Comments from Company Officers
Brad Childers, President and CEO of Archrock, highlighted the company's success in achieving several financial and strategic milestones during the quarter. He emphasized the significance of the TOPS acquisition, increased demand for compression services, and the company's strong position in the Permian Basin, forecasting substantial growth opportunities. Childers also noted the company's strategic capital investments to support customer needs and enhance shareholder returns.
Shareholder Returns
- Archrock announced a quarterly dividend of $0.175 per share, payable on November 13, 2024.
- The company repurchased 649,854 common shares at an average price of $18.63 per share, totaling approximately $12.1 million.
Forward Guidance
Archrock raised its full-year 2024 adjusted EBITDA guidance to a range of $575 million to $585 million, incorporating the financial impact of the TOPS acquisition.
Stock Price Movement
Following the earnings release, Archrock's stock price increased by 4.38%, reflecting investor confidence in the company's strategic direction and financial performance.
Overall, Archrock demonstrated significant revenue growth and strategic advancements, despite missing EPS projections, setting a solid foundation for future expansion and increased shareholder value.
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