Oct 29, 2026 earnings call — Middle East spoolable plant and Q3 results
Company plans a Middle East Spoolable Technologies plant with investment of approximately $100 million.
Revenue $0.4B (est $0.4B) · EPS $0.96 (est $0.77)
Key quotes
"We expect that the investment required to construct the facility will be approximately $100 million, which we anticipate being funded with internal cash generation."
"Pressure Control sales declined as expected, but bookings accelerated and margins exceeded expectations on improved cost control, synergy realization, and strong domestic performance."
"But as we anticipated, we saw a significant recovery this quarter in multiple countries in the Middle East, not just one or two. These orders do have delivery terms of 9-15 months, depending on what their timeline is."
Analyst Q&A 3
Baytown and Middle East spoolables growth
Q (Arun Jayaram · J.P. Morgan): How will the Baytown expansion plus the Middle East build support higher spoolables volumes? Also, when will Middle East destocking ease and backlog start to grow?
A: They said the Baytown expansion will add about 20% to Baytown capacity and dividing that number by 0.6 shows total potential production/revenue capacity. Management said spoolable margins should not suffer from more international exposure. For the Middle East, they said destocking has already begun to recover this quarter, orders carry delivery terms of 9-15 months, should continue in Q4, and they hope for a more normal pace in 2027.
"The Baytown expansion, which is currently underway but not fully realized, will add about 20% to our Baytown capacity." — Scott Bender (CEO·CHAIR)
Spoolables margins and Pressure Control drivers
Q (Derek Podhaizer · Piper Sandler): Why should spoolables margins hold up with more international sales? And why did Pressure Control margins beat in Q3 but guide lower in Q4?
A: They said spoolables can keep premium margins because they can produce large, high-pressure diameter pipe that competitors cannot. For Pressure Control, they said Q3 outperformance came from better-than-anticipated spares and repairs margins and additional synergy realization from Q2 actions; going into Q4, customer mix and the equipment versus service mix will drive margins back to 23%-25%.
"Going into Q4, really the customer mix and the equipment versus service mix is the driver of the margin degradation quarter-over-quarter that will take us back to 23%-25%." — Jay Nutt (CFO)
Middle East testing and U.S. market share
Q (Stephen Gengaro · Stifel): Is qualifying spoolables in the Middle East easier than for Pressure Control, and how should we think about U.S. Pressure Control share given private operator activity?
A: They said qualifying spoolables was not easy but they are much further along because they developed products and began testing in advance; all testing is underway and going as planned, expected done by end of the Q1/beginning of the Q2 with no hiccups. On U.S. Pressure Control, they said conversations with customers indicate Q1 will be a strong market share quarter, stopping public market-share reporting did not foreshadow a decline, and they expect improved market share through the end of Q1 though they cannot quantify it.
"All the testing is underway and going as planned, so that by the end of the Q1, beginning of the Q2, it will be done, but we are not seeing any hiccups at all." — Scott Bender (CEO·CHAIR)