Oil States International Reports Challenging Q3 and Nine-Month Financial Performance

Oil States International, Inc. reported a challenging financial performance for the third quarter and the first nine months of 2024, marked by significant revenue declines and increased operating losses compared to the same periods in 2023. For the three months ended September 30, 2024, total revenues were $174.3 million, a decrease of $19.9 million, or 10%, from $194.3 million in Q3 2023. The nine-month revenue also fell to $528.0 million from $574.0 million, reflecting an 8% decline.

The company's product revenues for Q3 2024 were $100.8 million, down from $102.6 million in the prior year, while service revenues plummeted to $73.6 million from $91.7 million, primarily due to reduced land-based customer investments in the U.S. The Offshore Manufactured Products segment, however, showed resilience with a revenue increase to $90.9 million from $88.6 million year-over-year, driven by military and offshore project-driven products.

Despite the revenue growth in the Offshore Manufactured Products segment, the overall operating loss for Q3 2024 was $(11.0) million, a stark contrast to the operating income of $6.2 million reported in Q3 2023. The nine-month operating loss also widened to $(20.2) million from an operating income of $15.3 million in the same period last year. The losses were exacerbated by substantial impairment charges totaling $34.6 million for the nine months, including $21.1 million related to the Completion and Production Services segment's exit from underperforming service offerings.

Net losses for Q3 2024 reached $(14.3) million, or $(0.23) per share, compared to a net income of $4.2 million, or $0.07 per share, in Q3 2023. For the nine months, the net loss was $(26.4) million, or $(0.42) per share, compared to a net income of $6.9 million, or $0.11 per share, in the same period of 2023.

In response to the challenging market conditions, Oil States initiated cost-reduction initiatives, including workforce reductions and the consolidation of manufacturing and service locations. The company also recorded significant non-cash impairment charges, including a $10.0 million goodwill impairment in the Downhole Technologies segment.

As of September 30, 2024, total assets decreased to $994.1 million from $1,046.5 million at the end of 2023, while total liabilities also fell to $309.3 million from $336.9 million. The company maintained a strong liquidity position with $46.0 million in cash and cash equivalents and no borrowings under its $125.0 million asset-based revolving credit facility.

Strategically, the company amended its ABL Facility in February 2024, extending the maturity date to February 2028, and authorized a new $50.0 million common stock repurchase program in October 2024, replacing the previous program. The company continues to monitor market conditions, including the impact of tariffs and geopolitical factors on its operations.