Service & Supply | Quarterly / Earnings Reports | Oilfield Services | First Quarter (1Q) Update

Newpark 1Q Earnings Hit by Sale of Permian Completions Segment

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Newpark Resources, Inc. has reported results for its first quarter ended March 31, 2014. 

Total revenues for the first quarter of 2014 were $242.8 million compared to $246.9 million in the fourth quarter of 2013 and $267.9 million in the first quarter of 2013.  Income from continuing operations for the first quarter of 2014 was $11.7 million, or $0.13 per diluted share, compared to $10.5 million, or $0.11 per diluted share, in the fourth quarter of 2013, and $14.9 million, or $0.16 per diluted share, in the first quarter of 2013. 

Discontinued operations in the first quarter of 2014 included a $22.1 million gain, or $0.22 per diluted share, from the March 2014 sale of the Environmental Services business.  Net income for the first quarter of 2014 was $35.0 million, or $0.36 per diluted share, which includes the gain on the sale.

Paul Howes, Newpark's President and Chief Executive Officer, stated, "We continue to see extremely strong demand in our mats rental business in the first quarter, with rental revenues reaching another quarterly record, up 24% sequentially and 66% year over year.  In response to the strong demand, we continue to focus on expanding our mats rental fleet, including in the UK. The construction of our previously announced capacity expansion to meet the increasing demand is now underway.  Revenues from our fluids systems segment were down slightly on a sequential basis, as the seasonal strength in Canada and recovery in the EMEA region were offset by declines in the U.S. market and Brazil.  The majority of the U.S. decline was attributable to our December 2013 sale of our completions services business and lower proppant sales in West Texas.  We continue to make significant progress with our Evolution® system, posting a record $48 million of revenues in the first quarter, surpassing the 2013 fourth quarter's record by 40%, marking a meaningful shift from oil-based mud to water-based fluids and helping to improve our fluids margins.

"Looking forward, with the sale of our Environmental Services business now complete, we believe we are well positioned to capitalize on growth opportunities in both our global drilling fluids markets and our mats markets and enhance shareholder value," concluded Howes.

Segment Results

The Fluids Systems segment generated revenues of $211.4 million in the first quarter of 2014 compared to $212.1 million in the fourth quarter of 2013 and $247.3 million in the first quarter of 2013.  Segment operating income was $15.7 million (7.4% operating margin) in the first quarter of 2014 compared to $15.2 million (7.1% operating margin) in the fourth quarter of 2013, which included a $2.7 million gain on the sale of completion services business, and $22.6 million (9.1% operating margin) in the first quarter of 2013.

The Mats and Integrated Services segment generated revenues of $31.4 million in the first quarter of 2014 compared to $34.9 million in the fourth quarter of 2013 and $20.6 million in the first quarter of 2013.  Segment operating income was $13.4 million (42.6% operating margin) in the first quarter of 2014 compared to $15.2 million (43.7% operating margin) in the fourth quarter of 2013 and $8.5 million (41.2% operating margin) in the first quarter of 2013.