Nine Energy Service reports Q3 EPS (39c), one estimate (47c)

Reports Q3 revenue $140.6M, one estimate$146.1M.”Third quarter revenue was in-line with expectations coming within our original guidance,” said Ann Fox, President and Chief Executive Officer, Nine Energy Service. “We continued to see activity declines throughout Q3, with the U.S. rig count declining by over 150 rigs, or approximately 20%, since the end of 2022. For Nine, July began on a normal trendline; however, we experienced activity declines as well as operational inefficiencies related to weather and frac delays in August, leading to elevated white space in the calendar, significantly impacting revenue and profitability. September returned to more normalized levels, and as we look forward, we are not expecting a recurrence of what happened in August in Q4 and expect the business to be back to trend for Q4, though some normal holiday and winter seasonality is expected.” “Cementing was impacted by the continued rig declines in Q3, especially because of our significant exposure to the Haynesville and Eagle Ford; however, we do anticipate Q4 cementing revenue to be slightly higher than Q3. Completion tool revenue was down quarter over quarter due to a reduction in international sales as well as the reduction in U.S. completion activity. We are extremely excited to announce the commercialization of our new Pincer Hybrid Frac Plug. The Pincer is comprised of 47% less material than our predecessor Scorpion Composite Frac Plug and has industry-leading drill-out times. We believe the new Pincer Plug will help increase our market share growth in the plug market.” “We believe we have reached a bottoming of the U.S. rig count and have already begun to feel a shift in sentiment as we look towards 2024. With what we know today, we anticipate 2024 activity to increase over current levels, but it is too early to provide a detailed outlook. For Q4, we anticipate overall activity levels to remain mostly flat and pricing to stabilize. We do not anticipate a recurrence of August in the fourth quarter, but do anticipate holidays, weather, and budget exhaustion to impact operations, especially in the Northeast. Because of this, we expect Q4 revenue and earnings to be flat to slightly up sequentially to Q3.” “Nine is a spot-market business and our financial results move closely with U.S. land activity levels. We have demonstrated our ability to capitalize on improving markets and we remain focused on executing our strategy as an asset-light business offering forward-leaning technology and excellent service to our customers.”