Dril-Quip, Inc. announced a net income of US$ 42.6 million, or US$ 1.04 per diluted share for the three months ended 31 March 2014, versus net income of US$ 39.8 million, or US$ 0.98 per diluted share for the first quarter of 2013.
Total revenues were US$ 204.1 million during Q1 2014 compared to US$ 193.2 million for the same period in 2013.
Customer equipment
The first quarter 2014 results were unfavourably impacted by the company's inability to recognise approximately US$ 10 million of revenue related to items of equipment that were completed but not accepted for delivery by one of its major customers. Dril-Quip is engaged in discussions with the customer to resolve a disagreement regarding certain contractual requirements.
In addition, the first quarter 2014 results were impacted by an after-tax foreign exchange loss of US$ 660 000, or US$ 0.02 per diluted share, as compared to an after-tax foreign exchange gain of US$ 4.1 million, or US$ 0.10 per diluted share during Q1 2013.
Earnings backlog
The company's backlog at 31 March 2014 was approximately US$ 1.35 billion, compared to a backlog of approximately US$ 1.02 billion last year, and its 31 December 2013 backlog of approximately US$ 1.18 billion.
Based on current market conditions and excluding any unusual or special charges, Dril-Quip expects its earnings per diluted share for the quarter ending 30 June 2014 to approximate US$ 1.05 to US$ 1.15.
2014 guidance
The company also announced that, due primarily to uncertainties surrounding the customer acceptance issues described above, its full-year 2014 earnings guidance is being reduced from a range of US$ 5 to US$ 5.20, to a range of US$ 4.70 to US$ 4.90, excluding any unusual or special charges.
Adapted from press release by Katie Woodward