Expro shares rise despite revenue miss as free cash flow jumps

HOUSTON - EOn Thursday, Expro Group Holdings N.V. (NYSE:XPRO) reported third-quarter adjusted earnings of $0.24 per share, below analyst estimates of $0.29, while revenue of $411.36 million missed the consensus forecast of $418.88 million.

The energy services provider’s shares rose 2.22% in pre-market trading after the announcement.

Despite the earnings and revenue miss, investors focused on the company’s strong free cash flow generation, which reached $39 million in the quarter, representing 9% of revenue. Adjusted free cash flow was even stronger at $46 million, or 11% of quarterly revenue, demonstrating Expro’s ability to convert earnings into cash.

The company reported a net income of $14 million, representing a 3% net income margin, while adjusted EBITDA came in at $94 million with a margin of 22.8%, which the company noted "ranks among the top in our peer group."

"Expro’s third quarter results once again demonstrate our commitment to operational excellence, innovation and free cash flow generation, even in a softer market backdrop," said Michael Jardon, Chief Executive Officer.

The company raised its full-year guidance for adjusted EBITDA to between $350 million and $360 million, up from its previous forecast of more than $350 million. It also increased its adjusted free cash flow guidance to between $110 million and $120 million, while lowering its revenue outlook to $1.6-1.65 billion from approximately $1.7 billion previously.

Expro repurchased approximately 2 million shares during the quarter at an average price of $12.06 per share, totaling $25 million. Year-to-date, the company has repurchased 3.7 million shares at an average price of $10.81, reaching its $40 million annual repurchase target ahead of schedule.

The company’s total order backlog stood at $2.3 billion at the end of September, providing visibility for future operations despite the softer market conditions mentioned by management.

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