Dril-Quip, Inc. (NYSE: DRQ) has announced net income of US$48.4 million, or US$1.28 per diluted share, for the three months ended December 31, 2015, versus net income of US$59.1 million, or US$1.50 per diluted share, for the fourth quarter of 2014. The fourth quarter 2015 results were favourably impacted by an after-tax foreign exchange gain of US$3.1 million, or US$0.08 per diluted share, as compared to an after-tax foreign exchange gain of US$2.6 million, or US$0.07 per diluted share, during the fourth quarter of 2014. Total revenues were US$201.6 million during the quarter ended December 31, 2015 compared to US$254.8 million for the same period in 2014.
For the year ended December 31, 2015, net income was US$192.0 million, or US$4.98 per diluted share, compared with net income of US$208.7 million, or US$5.19 per diluted share, for 2014. The results for the twelve months ended December 31, 2015 were favourably impacted by an after-tax foreign exchange gain of US$3.9 million, or US$0.10 per diluted share, as compared to an after-tax foreign exchange gain of US$3.4 million, or US$0.08 per diluted share, during the year ended December 31, 2014. Total revenues for the year ended December 31, 2015 were US$844.3 million, compared to US$931.0 million for the same period in 2014.
In addition, the company announced that its backlog at December 31, 2015 was US$685 million, compared to its December 31, 2014 backlog of approximately US$1.2 billion.
Blake DeBerry, Dril-Quip's President and CEO stated:
"Despite challenging industry conditions, we are pleased to announce full-year earnings per share results that exceeded our beginning-of-the-year expectations for 2015. The fact that both our gross margins and operating margins during 2015 compared favourably with those achieved in 2014 is indicative of the dedication and hard work by Dril-Quip employees around the world.
"Unfortunately, the worldwide reduction in the number of operating floating rigs, both semi-submersibles and drillships, resulted in disappointing bookings throughout the year and a reduced backlog as of December 31, 2015. We believe that the decrease in order levels was also negatively impacted by both a significant customer property overhang as well as shorter delivery times throughout the industry.
"Without a doubt, 2016 will be a challenging year as oil prices are expected to remain at depressed levels. Accordingly, we expect that increasing pricing pressures and reduced manufacturing activity will negatively impact our gross margins as the year progresses. However, we believe that our execution of existing backlog, low capital expenditure requirements and zero debt will result in significant free cash flow during the year.
"In addition, our continuing conservative management approach has resulted in a strong balance sheet that leaves us well-positioned to capitalise on opportunities for the long term benefit of our stockholders. During the downturn, the company intends to continue pursing attractive acquisition candidates as well as our stock buy-back programme. Our research and development efforts will continue – both in Houston and at our recently announced new HPHT R&D facility in Singapore. We believe that the enhancement of existing products combined with the introduction of new products will place the company in a strong position when the market rebounds."
Estimations based on current market conditions
Based upon current market conditions and excluding foreign currency gains/losses or any unusual items, the company expects its earnings per diluted share for the year ending December 31, 2016 to approximate US$2.45 to US$2.65 per share. In addition, first quarter 2016 earnings per share are expected to approximate US$0.75 to US$0.85 per share.
Dril-Quip is a leading manufacturer of highly engineered offshore drilling and production equipment, which is well suited for use in deepwater, harsh environment and severe service applications.
Adapted from a press release by Louise Mulhall
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/26022016/dril-quip-inc-4q-and-year-end-2015-results/