Shares of RigNet Inc (NASDAQ: RNET) are sinking today, down nearly 10% as of 3 p.m. EDT, after the company reported another loss in the first quarter.
RigNet had mixed first-quarter results. Revenue rose 12% year over year thanks to improving oil market conditions and the impact of recent acquisitions. The company's net loss, however, deepened from $2 million, or $0.11 per share, in the year-ago quarter to $5.6 million, or $0.31 per share, in the first quarter of 2018. That was much worse than the $0.16-per-share loss analysts expected to see this quarter.
Higher costs were the main factor causing RigNet's wider loss, as selling and marketing expenses doubled while general and administrative costs jumped 30%. The increased spending, however, is due in part to its recent acquisitions, as well as the company's desire to be in the position where it can capture more business as oil market conditions improve.
While oil prices have rebounded more than 50% over the past year, RigNet has yet to see much benefit because the industry has been slow to put more offshore drilling rigs back to work. However, oil companies have started approving more offshore drilling projects in recent months, which should yield higher activity levels in the coming quarters. As that happens, RigNet's financial results should improve.
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