What happened
Shares of ChampionX(NASDAQ: CHX) 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.
10 stocks we like better than ChampionX Corporation
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and ChampionX Corporation wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of September 30, 2022
Joe Tenebruso 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.
