Tidewater: Weak Offshore Drilling Activity Impacts Near-Term Outlook - Hold

Core Viewpoint - Tidewater Inc. reported weaker than expected Q3/2024 results, with revenues of $340.4 million and Adjusted EBITDA of$142.6 million, both below consensus expectations, despite achieving new multi-year highs [1][2] Financial Performance - Revenues for Q3/2024 reached $340.4 million, marking a new multi-year high [1] - Adjusted EBITDA was reported at$142.6 million, also a new multi-year high [1] - Active fleet utilization was disappointing at 75.4% [1] Operational Challenges - Management cited several issues contributing to underperformance: 1. Project delays in multiple regions [2] 2. Higher than expected drydocking requirements [2] 3. Weakness in offshore drilling activity [2] Future Outlook - The company anticipates that Q4 will benefit from higher utilization and lower drydocking costs [2] - Tidewater no longer expects to meet its recently revised full-year targets due to limited visibility [2] - The company abstained from providing initial guidance for 2025, citing uncertainty in offshore activity growth [2] - Concerns regarding slower oil demand growth, particularly in China, and geopolitical events have contributed to the uncertain outlook [2] Long-term Perspective - Despite current challenges, the long-term outlook for Tidewater remains attractive, with expectations that market concerns will clarify in the coming months [3] - Customers have engaged in sizable drilling campaigns, indicating potential future demand [3]