Tidewater is Friday's IBD Stock Of The Day, with the offshore oil services provider surging above a buy point after posting its highest quarterly sales in eight years, even as fourth-quarter earnings and revenue came in under expectations.
The Houston-based company reported worse-than-expected earnings and revenue late Thursday and approved a new $48.6 million share repurchase program. Tidewater EPS grew 97% to 59 cents with sales totaling $302.7 million, up 62% vs. Q4 2022 and the highest quarterly revenue in eight years.
However, analysts had expected earnings of 73 cents per share with revenue hitting $309.5 million, just above Tidewater's Nov. 7 guidance of $309 million.
For the full year, Tidewater saw earnings surge 682% to $1.72 per share with sales increasing 56% to $1.01 billion. The company has now turned a profit in two consecutive years after a long string of losses.
The company also reiterated on Thursday 2024 revenue guidance of $1.40 billion-$1.45 billion along with gross margins of 52%. Wall Street expects revenue of $1.42 billion in 2024, according to FactSet.
Tidewater owns and operates one of the largest fleets of OSVs (offshore support vessels) in the industry. Global in scale, the company operates in the Americas, Asia-Pacific, Middle East, Europe and Mediterranean, and West Africa.
Company Ups Stock Buyback Program
Chief Executive Quintin Kneen said Thursday in the earnings release that with "improved industry fundamentals" Tidewater is "once again in a position to return capital to shareholders."
Kneen added the "initial phase" occurred in Q4 with the company completing $35 million in share repurchases. Tidewater approved a new $48.6 million for stock buybacks on Thursday. That is the maximum permissible amount under existing debt agreements, according to the company.
"We are excited to continue to grow free cash flow and return capital to our shareholders as this upcycle continues to unfold," he said.
Tidewater Stock Performance
Rebounding oil prices have been helping oil plays in recent days. West Texas Intermediate (WTI) oil prices on Friday traded hit $80, the highest level in four months and were on pace for a 5% gain on the week. Fellow oil field service firm TechnipFMC, Thursday's IBD Stock Of The Day, rose briefly above a buy point on Friday.
Tidewater stock surged 14.3% in above volume traffic to 80.05 during Friday's market action. Tidewater stock stormed above an official 77.53 buy point after racing past early entries at 74.48 and 74.98.
The stock is on pace for its fourth consecutive weekly advance. TDW shares gained more than 4% in February and are up around 11% in 2024.
Tidewater stock has a 91 Composite Rating out of 99, an 87 Relative Strength Rating and an 81 EPS Rating.
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