What happened
Shares of ChampionX (CHX -0.43%) popped 18% on Wednesday after the engineering technology provider's third-quarter results impressed investors.
So what
ChampionX's revenue jumped 25% year over year to $1 billion, fueled by strong growth in the company's production chemical technologies business. Sales in this segment climbed 32% to $643.6 million due to a favorable combination of market share gains, higher volumes, and price increases.
Better still, ChampionX is becoming more profitable as it expands its revenue base. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 34% to $67.8 million. And its adjusted earnings per share, which were boosted by stock buybacks, soared 120%, to $0.33.
"The third quarter reflected the building strong momentum for ChampionX as we delivered strong performance on all key metrics, including revenue growth, adjusted EBITDA margin expansion, free cash flow generation, and capital returned to our shareholders," CEO Sivasankaran Somasundaram said in a press release.
Now what
ChampionX is helping its oil pipeline customers improve the capacity and efficiency of their operations. Demand for its services, in turn, is booming.
The company is also producing bountiful cash flow. It generated operating and free cash flow of $187.2 million and $167.4 million, respectively, in the third quarter alone.
Management is committed to passing much of this cash on to shareholders via dividends and buybacks. In that regard, ChampionX's board of directors approved a $500 million increase to its share repurchase program, bringing it to a total authorization of $750 million.
