Forum Energy’s adjusted earnings jump 30%, revenue reaches $236.813 million
Key Facts
Forum Energy Technologies reported third-quarter results on Oct. 29, posting adjusted diluted earnings per share of $1.51 and adjusted net income of $18 million, up 30% and 33% year over year, respectively, according to a company statement published via Nasdaq. Adjusted earnings per share topped MarketBeat’s estimate of $1.22, while revenue was $236.813 million, compared with an estimate of $233.35 million. Revenue also rose from $196.231 million a year earlier and $226.217 million in the second quarter. The results point to concurrent improvement in sales and adjusted profitability, while the company said its adjusted EBITDA margin widened to 15%. Adjusted EBITDA was $36 million, up 14% from the previous quarter.
The company increased orders during the quarter to $244 million, with a book-to-bill ratio of 103%, reflecting orders exceeding the value of sales recorded in the period. Operating liquidity also improved: operating cash flow was $32 million and free cash flow was $30 million, up 158% and 214% year over year, respectively. Chief Executive Neil Lux said the company generated "more than $30 million in free cash flow," alongside a 5% increase in revenue from the previous quarter and a 14% rise in adjusted EBITDA. He added that the adjusted EBITDA margin was 15% in the quarter. The company also said it reduced net debt, bringing net leverage to 0.9 times.
The Drilling and Completions segment led revenue by segment, posting $147 million, up 6% from the previous quarter. Its adjusted EBITDA rose 28% to $21 million over the same period. The Artificial Lift and Downhole segment reported revenue of $90 million, up 3% quarter over quarter. The company attributed the segment’s growth to the addition of Premiere Torque Rings products and increased demand for sand and flow control solutions and valve products. The company acquired Premiere Torque Rings during the third quarter, according to its statement.
Forum raised its full-year revenue forecast to a range of $900 million to $920 million and set fourth-quarter revenue guidance at $230 million to $250 million. The annual guidance follows revenue of $236.813 million in the third quarter, compared with $226.217 million in the second quarter. The higher forecast comes alongside orders of $244 million and a book-to-bill ratio of 103%, as well as free cash flow of $30 million. The company also reported reducing net debt and bringing net leverage to 0.9 times. The statement did not specify a later date for announcing results or updating guidance in the information provided.
In trading on Oct. 28, FET shares closed at $90.91, according to EL7 data. Before the results announcement, a report published by Investing.com, citing Reuters, said the stock was near its 52-week high of $91.48. The report noted that the shares had risen 185% during the year through Oct. 29. This places the stock’s pre-announcement performance in the context of a strong rally, while the reported results provide figures on revenue, orders, liquidity and adjusted profitability. The company’s revenue forecasts for the fourth quarter and the year remain the next focus in the available data.