Dril-Quip, Inc. (NYSE:DRQ) Q3 2022 Results Conference Call October 28, 2022 10:00 AM ET

Company Participants

Erin Fazio - Finance Director

Jeff Bird - President and Chief Executive Officer

Kyle McClure - VP & CFO

Conference Call Participants

David Smith - Pickering Energy Partners

Operator

Good day, and thank you for standing by. Welcome to the Dril-Quip Third Quarter 2022 Fireside Chat [Operator Instructions]. Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your speaker today Erin Fazio, Finance Director for Dril-Quip. Please go ahead.

Erin Fazio

Thank you, Liz and good morning. Welcome to Dril-Quip's third quarter 2022 fireside chat. Our news release and financial statements issued yesterday can be found on our Web site. As a reminder, during the course of this conference call, we will provide forward looking statements. These statements are not guarantees of future performance and involve a number of risks and assumptions. Please review our SEC filings and Web site for a discussion of the factors that could cause actual results to differ materially. As you know, reconciliations of operating income and other GAAP to non-GAAP measures can be found in our earnings release.

With that, I'll turn the call over to David Smith of Pickering Energy Partners.

David Smith

Thank you, Erin, and good morning. My name is Dave Smith. I'm the lead oilfield services analyst at Pickering Energy Partners. I want to say thank you for this opportunity to host Dril-Quip's third quarter fireside chat. And Jeff, I look forward to our discussion after your prepared remarks. I'll turn it over to you.

Jeff Bird

Yes. Thanks, David. Look forward to the discussion today. To be direct, the results of the quarter did not meet our expectations. There were a few transitory items in the quarter that we believe are nonrecurring headwinds to the results. That having been said, the incoming order trend was $75 million and at the high end of our expected range of $60 million to $80 million. We were also pleased with the quality of those incoming bookings in the quarter with the expected margin on those bookings the highest so far this year as a result of favorable mix and improving pricing. We expect this to obviously benefit future coming quarters. The income bookings number was muted by a cancellation in the quarter that's quite frankly uncommon at Dril-Quip. I think in the five years I've been here, this is only the third time that I've seen a cancellation of this size, so quite uncommon.