Cactus Q1 Earnings Top Estimates on Pressure Control Contributions

Cactus, Inc. WHD reported adjusted earnings of 70 cents per share in the first quarter of 2026, down 4.1% from the year-ago level of 73 cents but ahead of the Zacks Consensus Estimate of 65 cents by 7.7%.Quarterly revenues rose 38.5% year over year to $388.35 million and topped the consensus mark of $380.81 million by 2%. Remaining performance obligations ended the quarter at $537.5 million, led by international Pressure Control work tied to the newly added Cactus International business.The better-than-expected quarterly results can be attributed to higher revenues in the Pressure Control segment, aided by the acquisition of Cactus International. However, several transaction-related and acquisition-accounting charges partly offset the gains.Cactus, Inc. Price, Consensus and EPS Surprise Cactus, Inc. price-consensus-eps-surprise-chart | Cactus, Inc. QuoteWHD Benefits From Cactus International DealThe quarter marked the first period to include results from Cactus International, following the Jan. 1 closing of the majority-interest acquisition. Management stated that Pressure Control revenues stayed resilient even as the conflict in the Middle East created shipment delays and operational friction.Pressure Control revenues totaled $300.2 million for the quarter, higher than $190.3 million in the year-ago quarter and above our estimate of $300 million. Segment operating income totaled $38.6 million, down from $54.3 million in the prior-year quarter, reflecting the impact of purchase price accounting, including an inventory step-up and intangible value amortization.Adjusted segment EBITDA for Pressure Control was $71.8 million, higher than $64.8 million in the prior-year quarter. Our estimate for the same was pinned at $74.9 million. Adjusted segment EBITDA margin was 23.9%.Cactus’ Spoolable Technologies Segment Holds UpManagement highlighted that the Spoolable Technologies segment recorded non-U.S. revenues in the quarter, with strength cited in the Middle East and Latin America, alongside better-than-expected domestic activity. The segment witnessed stronger-than-typical seasonal demand and continued international order growth.Spoolable Technologies' revenues were $89.9 million, lower than $92.6 million in the year-ago quarter and above our estimate of $83.7 million. The segment's operating income totaled $23.6 million, slightly lower than $23.9 million in the prior-year quarter.Adjusted segment EBITDA totaled $32.9 million, translating to a 36.6% margin, as improved operating leverage helped offset higher input costs. This is comparable to adjusted segment EBITDA of $33.5 million, with a 36.2% margin in the year-ago period. On the call, management also pointed to a recent increase in polyethylene pricing as a cost item that the team expects to address through mitigation and recovery actions.WHD’s Adjusted Profit Hit by Purchase AccountingWhile the acquisition expanded Cactus’ footprint, it also weighed on reported profitability comparisons due to non-cash items tied to purchase accounting. Operating income for the quarter totaled $49.5 million compared with $68.6 million in the first quarter of 2025. The company posted adjusted net income of $56.2 million, even as the income statement reflected several transaction-related and acquisition-accounting charges.Adjusted EBITDA was $100.1 million, and key add-backs included $10.4 million of inventory step-up expenses, $5.8 million of transaction-related expenses and $7 million of stock-based compensation. Management emphasized that these adjustments are intended to improve comparability as integration work progresses.Cactus' Strong Cash Flow, Maintained Dividend Cactus generated $128.3 million of cash flow from operations during the quarter, reflecting solid underlying cash conversion even as working-capital timing was influenced by acquisition-related restructuring steps. The company ended March with $291.6 million in cash and cash equivalents, including $97.8 million retained to finalize certain restructuring activities connected to Cactus International.Capital allocation remained shareholder-friendly. The company paid a quarterly dividend of 14 cents per share, with cash outflows of $11.7 million, including related distributions. Net capital expenditures were $9 million, and the company repurchased $7.9 million of shares during the quarter while maintaining no bank debt outstanding.WHD Sees Q2 Mix Shifting With Conflict EffectsFor the second quarter, management expects Pressure Control revenues to be approximately flat. Stronger sentiment and activity in the domestic market are expected to be offset by the full-quarter impact of the Middle East conflict on the Cactus International joint venture. Pressure Control adjusted EBITDA margins are guided to 22-24%, excluding stock-based compensation and inventory write-up amortization tied to purchase accounting.Spoolable Technologies’ revenues are expected to grow at a mid-single-digit pace, driven primarily by higher North American activity, with adjusted EBITDA margins guided to 36-38%. On costs and planning items, management cited a 19% expected effective tax rate, second-quarter depreciation and amortization of roughly $37 million and reiterated full-year 2026 net capital expenditures of $40-$50 million.WHD’s Zacks Rank and Key PicksWHD currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks from the energy sector are Equinor ASA EQNR, Matador Resources MTDR and Galp Energia SGPS SA GLPEY. At present, Equinor and Matador sport a Zacks Rank #1 (Strong Buy) each, while Galp Energia carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.Equinor ASA is one of the leading integrated energy companies globally and a major supplier of natural gas in Europe. The recent conflict between the United States and Iran has resulted in a spike in gas prices and disrupted LNG supply, following damage to critical infrastructure in Qatar, tightening global LNG supply. This is expected to boost demand for Equinor’s gas exports to Europe, positioning it to benefit from heightened prices. The company’s expansion in the renewable energy space positions it for long-term growth as more countries transition toward cleaner energy solutions to meet their climate goals.Matador Resources is primarily involved in exploration and production activities, particularly in the prolific Delaware Basin of the United States. The company intends to grow its oil production by 3% in 2026. Since its overall production is mainly oil-weighted, MTDR is expected to significantly benefit from the current increase in crude prices.Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly with the Mopane discovery in the Orange Basin, offshore Namibia. This discovery allows Galp to diversify its global presence with the potential to become a significant oil producer in the region. It is engaged in refining and marketing of oil products and natural gas marketing and sales.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks