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What’s Affecting Flotek Industries’ Revenue

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Flotek Industries’ revenue growth by segments

We’ll now look into Flotek Industries’ (FTK) segment performance in 4Q16. The Energy Chemistry Technologies segment accounted for 68% FTK’s 4Q16 revenues. Revenues in this segment rose 10% in 4Q16 over 4Q15. Flotek Industries is 0.11% of the iShares S&P Small-Cap 600 Value ETF (IJS). The energy sector accounts for 4.0% of IJS.

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What affected FTK’s annual revenues?

Despite higher revenues in 4Q16 over 4Q15, FTK’s fiscal 2016 revenues fell ~2.7% over fiscal 2015 on account of reduced demand from oilfield market activity. This fall was partially offset by better prices in FTK’s CICT segment.

FTK’s future business drivers

  • Compared to 2015, FTK’s sales were 14.7% higher in 2016 despite a steady decline in completion activities in the upstream industry. FTK’s management believes that in 2017, growth opportunities will improve with higher completion activities.
  • Flotek is expanding its operations across Asia, the Middle East, and Eastern Europe, which could provide growth opportunities for the coming periods.
  • Flotek’s acquisition of International Polymerics provided access to the unconventional energy-rich Permian Basin.

Next, we’ll discuss Flotek Industries’ operating income from these segments and what affects its net income.

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