Release Date: April 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Jim Rollyson from Raymond James asked about the offshore/manufactured products business, noting two quarters of sub-1 times book-to-bill but a strong outlook for offshore. He inquired about the bidding process, order slips, and the timing of revenue recognition.
A: Cynthia Taylor, President and CEO of Oil States International, explained that despite a book-to-bill ratio below 1, the bookings were strong in Q4 due to major projects accelerating revenue recognition. She mentioned a significant order expected in Q2 and remains confident about achieving a book-to-bill ratio above 1 for the year. Taylor anticipates a steady revenue and EBITDA increase throughout the year, influenced by secured backlog and service orders.
Q: Luke Lemoine from Piper Sandler asked for an update on the evolution of the downhole technologies segment, including key initiatives and new product rollouts.
A: Cynthia Taylor highlighted the integration of short-cycle offshore products with downhole technologies, improving the segment's structure and management. She noted sequential improvements in revenue and EBITDA for the base business and expects further enhancements from domestic and international sales, particularly in perforating technologies.
Q: Stephen Gengaro from Stifel asked if the recasting of segments affects the potential margin profile or incrementals in the offshore/manufactured products business.
A: Cynthia Taylor clarified that the margin profile remains similar post-recast and does not anticipate changes in incrementals, attributing potential increases to top-line growth and cost absorption rather than the mix of businesses.
Q: Stephen Gengaro also inquired about the factors contributing to the change in full-year guidance, particularly if it was related to US land activity.
A: Taylor attributed the guidance adjustment to a lower-than-expected quarter in the offshore/manufactured products business and emphasized managing exposure in low-activity natural gas plays efficiently while preparing for potential uplifts in 2025.
Q: John Daniel from Daniel Energy Partners asked about capitalizing on the current disconnect in natural gas markets, given their constructive medium to long-term outlook.
A: Cynthia Taylor discussed focusing on cost management and retaining field service technicians (FSTs) through strategic rotations to other plays, aiming to mitigate losses while maintaining operational readiness for future opportunities.
Q: Stephen Gengaro queried about the competitive landscape changes in the perforating business, especially with competitors looking to sell their businesses, and how it affects pricing and market dynamics.
A: Taylor acknowledged potential market health improvements due to competitor exits and emphasized Oil States' commitment to technology and market strategy adaptations, aiming to support customers across the supply chain and enhance international market penetration.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
