Cactus, Inc. WHD reported third-quarter 2024 adjusted earnings of 79 cents per share, which beat the Zacks Consensus Estimate of 74 cents. However, the bottom line declined from the year-ago quarter’s 80 cents.

Total quarterly revenues of $293.2 million beat the Zacks Consensus Estimate of $283 million. The top line increased from the year-ago figure of $288 million.

The better-than-expected quarterly results can be attributed to increased revenues from both segments. This was partially offset by lower customer drilling activity in the Pressure Control segment. 

Cactus, Inc. Price, Consensus and EPS Surprise

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

Business Segments

Following the closure of the FlexSteel acquisition, Cactus reported under two business segments — Pressure Control and Spoolable Technologies.

WHD generated revenues of $185.1 million from the Pressure Control segment, up from $182.5 million reported in the year-ago quarter. The segment was partially affected by decreased customer drilling and completion activity. The top line was above our estimate of $178 million.

Adjusted Segment EBITDA for Pressure Control totaled $61.9 million, down from $65.3 million in the prior-year quarter. The reported figure was above our estimate of $61.2 million.

Revenues from the Spoolable Technologies segment came in at $108.2 million, up from $103.7 million in the prior-year quarter. The figure was above our estimate of $100.6 million. The segment was aided by increased customer activity levels.

Adjusted Segment EBITDA for the unit totaled $42.5 million, flat year over year. The figure was above our estimate of $40 million.

Capex and Cash Flow

Cactus’ capital expenditure and other amount for the quarter totaled $10 million. Operating cash flow amounted to $85.3 million.

Balance Sheet

Cactus had cash and cash equivalents of $303.4 million at the end of the third quarter of 2024. The company had no bank debt outstanding as of Sept. 30, 2024.

Outlook

Cactus expects relatively subdued U.S. land drilling activity levels. In the fourth quarter, the U.S. land rig count is expected to remain stable, with possible activity reductions due to seasonal factors and budget constraints. Pressure Control may see modest sales reversion, with Spoolable Technologies facing typical seasonal contraction, partially offset by international demand.

It expects net capital expenditures to be in the band of $32-$37 million for full-year 2024, down from the previously guided range of $35-$45 million.

Zacks Rank and Key Picks

Currently, WHD carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector may look at some better-ranked stocks like Archrock Inc. AROC, Sunoco LP SUN and The Williams Companies, Inc. WMB. While Archrock sports a Zacks Rank #1 (Strong Buy), Sunoco and Williams Companies carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States. It focuses on midstream natural gas compression, provides natural gas contract compression services and generates stable fee-based revenues.

The Zacks Consensus Estimate for AROC’s 2024 EPS is pegged at $1.10. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes over 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value Score of A.

The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $9.28 and $6.76, respectively. The partnership has witnessed upward earnings estimate revisions for 2025 in the past seven days.

The Williams Companies is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing, and transporting natural gas and natural gas liquids. Boasting a widespread pipeline system of more than 33,000 miles, Williams is one of the largest domestic transporters of natural gas by volume.

The Zacks Consensus Estimate for WMB’s 2024 EPS is pegged at $1.75. The company has witnessed upward earnings estimate revisions for 2024 in the past seven days.

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