Archrock Q3 revenue falls and misses estimates; adjusted EBITDA rises
Overview
U.S. natural gas compression firm's Q3 revenue declined and missed analyst expectations
Adjusted EBITDA rose year-over-year and beat analyst estimates
Company raised quarterly dividend by about 10% from prior year
Outlook
Archrock reaffirms 2026 adj EBITDA guidance of $865 mln to $885 mln
Company says demand fundamentals remain strong, supported by tight compression market and LNG export growth
Company expects near-term cost pressure from higher lube oil prices but is mitigating through efficiencies
Result Drivers
PERMIAN BOOKINGS - Co said strong bookings in the Permian Basin and higher gas-to-oil ratios supported sustained compression demand
AFTERMARKET WEAKNESS - Reduced customer demand for major maintenance service activity and lower parts sales weighed on aftermarket services revenue
COST DISCIPLINE - Co said it is using cost discipline and operating efficiencies to address higher input costs
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue | Miss | $370.80 mln | $385.95 mln (6 Analysts) |
Q3 Net Income | $84.50 mln | ||
Q3 Adjusted EBITDA | Beat | $228.40 mln | $218.79 mln (8 Analysts) |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 8 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"
The average consensus recommendation for the oil related services and equipment peer group is "buy"
Wall Street's median 12-month price target for Archrock, Inc. is $41.00, about 29.3% above its October 30 closing price of $31.70
The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 17 three months ago
Reuters Recommended Reads
Nov 2 - US LNG exports hit second-highest monthly level on record as Europe demand surges
Nov 2 - Natural gas flows to Cheniere, Freeport LNG plants fall, LSEG data shows
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)