RES Q2 Earnings Beat Estimates on Better Job Mix, Revenues Miss

RPC, Inc. RES reported second-quarter 2026 adjusted earnings of 8 cents per share, which beat the Zacks Consensus Estimate of 4 cents by 100%. The bottom line also improved from the year-ago quarter's 6 cents.

Revenues of $460.87 million increased 9.5% year over year but missed the consensus estimate of $464 million by 0.7%.

Better job mix, modest pricing gains and operating leverage supported profitability. However, lower Pintail Wireline revenues partly offset the positives.

RPC, Inc. Price, Consensus and EPS SurpriseRPC, Inc. Price, Consensus and EPS Surprise

RPC, Inc. price-consensus-eps-surprise-chart | RPC, Inc. Quote

Segmental Performance of RES

Technical Services revenues were $438.12 million, up 1% sequentially and 10.4% year over year. Operating profit in the Technical Services segment totaled $27.56 million compared with $21.12 million a year earlier. Increased revenues in Cudd Pressure Controls' Snubbing, Spinnaker's Cementing and Thru-Tubing Solutions' Downhole Tools primarily supported the segment. However, a decrease in Pintail Wireline revenues offset the positives.

Support Services revenues increased 11% sequentially to $22.75 million but declined from $24.06 million in the year-ago quarter. The sequential improvement was led by Patterson Rental Tools. Operating income declined to $2.29 million from $4.64 million in the year-ago quarter.

The company's total operating income in the quarter was $14.77 million compared with $15.54 million in the year-ago quarter. The average domestic rig count declined 3% year over year.

The average oil price was $96.54 per barrel, up 49.1% year over year. The average natural gas price was $2.94 per thousand cubic feet (Mcf), down 8.1% from $4.81 per Mcf recorded in the corresponding period of 2025.

RES Records Higher Costs but Better Net Margin

Cost of revenues, excluding depreciation and amortization, increased 8.8% year over year to $345.72 million. The rise reflected expenses associated with higher activity levels.

Selling, general and administrative expenses climbed to $51.52 million from $40.83 million a year ago, mainly due to higher activity-related variable costs and increased professional and advisory fees. Depreciation and amortization rose 1.5% year over year to $42.98 million.

Adjusted EBITDA increased 8.4% to $65.97 million from $60.87 million in the year-ago quarter. However, the adjusted EBITDA margin contracted 20 basis points to 14.3% year over year. Adjusted net income rose to $17.80 million from $15.38 million, while the adjusted net income margin improved to 3.9% from 3.7%.

Story Continues

RPC Maintains Strong Financial Flexibility

RPC ended the quarter with $179.47 million in cash and cash equivalents. The company had no outstanding borrowings under its $100 million revolving credit facility.

Operating cash flow totaled $74.61 million during the first six months of 2026. After capital expenditures of $70.84 million, free cash flow was $3.77 million. Growth in accounts receivable and the timing of customer collections weighed on working capital.

RES Raises Capital Spending Range

Management now expects 2026 capital expenditures of $170-$190 million. The increase reflects targeted investments in areas offering attractive full-cycle returns, although some spending could shift into 2027 because of equipment lead times.

The company remains cautious about near-term industry activity and does not plan to reactivate pressure-pumping fleets at current pricing levels. The board also maintained the quarterly dividend at 4 cents per share.

RES's Zacks Rank & Key Picks

RES currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the energy sector are Valero Energy VLO, HF Sinclair DINO and FuelCell Energy FCEL, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here.

Valero Energy is a leading refining player with a robust network of 14 refineries and a combined high-complexity throughput capacity of 3 million barrels per day, which distinguishes it from other independent refiners. Valero's refineries have a combined Nelson Complexity Index of 11.5, which implies that they can process a wide variety of feedstocks, convert them into higher-value products and shift product yields according to market conditions.

HF Sinclairis an independent energy company producing and marketing gasoline, diesel, jet fuel, renewable diesel, lubricants, and specialty products. Incorporated in Delaware in 1947 and headquartered in Dallas, TX, it operates refineries in Kansas, Oklahoma, New Mexico, Wyoming, Washington and Utah and provides transportation, terminaling and storage services to its refineries and third parties.

FuelCell Energy is a clean energy company that offers scalable, reliable, low-carbon power solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company's proprietary molten carbonate fuel cell systems generate electricity through an electrochemical process instead of burning fuel, reducing carbon emissions and minimizing the environmental impact of power generation. FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.

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