ChampionX Reports Mixed Q3 Results, Decline in Revenue Offset by Improved Profitability

ChampionX Corporation reported its financial results for the third quarter and the nine months ended September 30, 2024, reflecting a mixed performance compared to the previous fiscal period. Total revenue for the three months ended September 30, 2024, was $906.5 million, a decrease of 3.5% from $939.8 million in the same period of 2023. This decline was primarily driven by a reduction in product revenue, which fell to $771.8 million from $827.7 million year-over-year, while service revenue increased to $105.0 million from $86.8 million.

Despite the revenue decline, gross profit for the quarter rose to $297.8 million, up from $291.9 million in the prior year, indicating improved profitability. However, net income for the quarter decreased to $73.7 million from $80.8 million in the same period last year, with net income attributable to ChampionX also declining to $72.0 million from $77.7 million. Earnings per share for the quarter were $0.38, down from $0.40 in the previous year.

For the nine months ended September 30, 2024, total revenue was $2.72 billion, a decrease of 3% from $2.81 billion in the same period of 2023. However, net income increased slightly to $242.2 million from $240.6 million, with net income attributable to ChampionX rising to $237.5 million from $237.0 million. Earnings per share for the nine-month period improved to $1.25 from $1.20.

Strategically, ChampionX has been active in mergers and acquisitions, entering into a merger agreement with Schlumberger Limited on April 2, 2024. This all-equity transaction will see ChampionX become an indirect wholly owned subsidiary of Schlumberger, with each share of ChampionX common stock converting into 0.735 shares of Schlumberger common stock. The company incurred $23.4 million in legal and professional fees related to this merger during the nine months ended September 30, 2024.

Additionally, ChampionX completed several acquisitions, including OTS Consulting Services for $8.7 million and Artificial Lift Performance Limited for $13.4 million, both aimed at enhancing its Production & Automation Technologies segment. The company also acquired RMSpumptools Limited for $106.1 million, which contributed to its growth strategy.

ChampionX's cash and cash equivalents increased significantly to $389.1 million as of September 30, 2024, up from $288.6 million at the end of 2023. The company reported total assets of $3.38 billion, with total stockholders' equity rising to $1.80 billion from $1.68 billion at the end of 2023. The company remains focused on optimizing profitability through restructuring initiatives and managing market conditions, including inflation and oil price volatility.