What happened

Shares of RPC, Inc. (NYSE:RES) slumped on Wednesday, down 10% as of 10:45 a.m. EST, after the oil and gas services specialist reported fourth-quarter results.

So what

RPC posted $427.3 million in revenue during the fourth quarter, which was a jaw-dropping 93.4% above the year-ago quarter. Driving that improvement was a significant uptick in oil market conditions, which resulted in higher activity levels and improved pricing for the company's services. That market rebound also helped drive earnings into the black, with RPC reporting $38.4 million ($0.18 per share) in adjusted net income for the quarter, more than reversing the year-ago loss of $21.1 million ($0.10 per share).

An oil field at sunset.

Image source: Getty Images.

That said, as good as the quarter was versus 2016, it wasn't as good as the third quarter, and it missed analysts' expectations. Not only did revenue fall $89 million short, but earnings came in $0.16-per-share below the consensus estimate. One factor was that the rig count in the U.S. slipped 2.6% versus the third quarter, with the company noting that revenue decreased at a greater rate than this metric due to expected seasonal slowdowns. As a result, "RPC's fourth-quarter results interrupted the strong trends of the past several quarters," according to CEO Richard Hubbell. However, the company did say that higher oil prices should lead customers to increase activity levels in 2018, which when combined with a benefit from the recent tax cuts, should help boost earnings and cash flow this year.

Now what

While RPC's shares are selling off after reporting disappointing results, the fourth quarter looks like it's just a small speed bump in the company's recovery. It's not the only one that sees even better days ahead: Larger oil-field service rivals also appear even more bullish on 2018. Halliburton, for example, provided a similarly optimistic outlook, noting that margins are improving and that it sees increased activity from customers. 

Matthew DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.