Tidewater: Muted Near-Term Outlook, But Still Highly Profitable - Buy (Upgrade)

2025-03-05 17:07:57 ET

Summary

• Adjusted for foreign exchange impact, Tidewater reported Q4 2024 and full-year results largely in line with management's most recent projections.
• Fourth quarter results benefited from an uptick in active fleet utilization. Key financial metrics like vessel operating margin and free cash flow increased to new multi-year highs.
• The company continues to return capital to equity holders in the form of share buybacks. For 2025, the BoD approved a new $90.3 million repurchase program.
• While management remained optimistic on the industry's medium-term outlook, persistent weakness in offshore drilling activity will impact near term results.
• Following the massive selloff in recent weeks, I am upgrading my rating from "Hold" to "Buy" on expectations for persistently strong cash generation and sizable shareholder capital returns.

Note: Tidewater Inc. or “Tidewater” (NYSE: TDW ) has been covered by me previously, so investors should view this article as an update to my earlier publications on the company. ...

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