Deep Down returns to profit in 2Q
- Business & Finance
U.S. oilfield services company Deep Down posted a profit for the second quarter of 2017 compared to a loss in the prior-year period despite decrease in revenues.
The company on Monday reported a net income of $0.5 million for the second quarter of 2017, compared to a net loss of $0.5 million for the second quarter of 2016.
Revenues for the second quarter 2017 were $5.4 million compared to revenues of $6 million for the same period in 2016. The 11 percent decrease was primarily a result of fewer jobs in process during the second quarter of 2017 compared to 2016, the company explained.
Gross profit for the quarter ended June 30, 2017 was $2.7 million, or 50 percent of revenues, compared to $1.9 million, or 33 percent of revenues, for the quarter ended June 30, 2016. Despite the lower revenues in 2017, gross profit increased by $0.7 million, or 17 percent increase in gross profit percentage, due to a larger portion of higher margin service work and resolution of an outstanding customer issue, according to the company.
Ronald E. Smith, Chief Executive Officer, stated, “We are pleased with our performance during the first half of the year, especially in light of the challenges across the industry. However, while we were able to realize markedly improved gross margins during the first half of the year, delays in contract executions will likely hamper our performance during the latter part of the year.”
Therefore, Smith added, the company anticipates focusing more on service projects.