Archrock bullish on 2024

Sees third quarter net income nearly double

Archrock reported that revenue for the third quarter of 2023 was $253.4 million compared to $213.7 million in the third quarter of 2022. (Image: Archrock)

Archrock, a leading provider of natural gas compression services in the U.S., released an upbeat outlook for 2024 as part of its most recent earnings report.

The Houston-based company reported third-quarter earnings of $253.4 million, compared to $213.7 million in the same period of last year. Net income was nearly double--$30.9 million to $15.4 million.

“During the third quarter, we delivered excellent operational and financial performance and set new records for utilization, monthly revenue per horsepower and quarterly Adjusted EBITDA,” said Brad Childers, Archrock’s resident and CEO.

“Our 2024 new build capital is fully committed and we are seeing booking demand extend into 2025,” Childers continued. “Investment in oil basins with associated gas remains strong, and our customers are planning critical infrastructure to support growing LNG exports from the U.S. We believe durable natural gas production growth and strong demand for compression, combined with tight equipment supply and continued capital discipline across the value chain, support a steady and prolonged upcycle for our business.”

Childers said the company was “excited” about what Archrock’s transformed platform can continue to deliver next year and beyond.

“This includes our expectation for enhanced profitability, improved financial returns and positive free cash flow,” he said.

For the third quarter of 2023, contract operations segment revenue totaled $207.6 million, an increase of 22% compared to $170.5 million in the third quarter of 2022. Gross margin (a non-GAAP measure defined below) was $132.3 million, up 34% from $98.8 million. Gross margin percentage was 64% for the third quarter of 2023, compared to 58% in the third quarter of 2022. Total operating horsepower at the end of the third quarter of 2023 was 3.6 million compared with 3.4 million at the end of the third quarter of 2022. Utilization at the end of the third quarter of 2023 was 96%, compared to 89% at the end of the third quarter of 2022.

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