C&J Energy Services, Ltd. (NYSE:CJES) Q3 2018 Earnings Conference Call Transcript
Nov 01, 2018 • 10:00 am ET
Good morning, everyone, and welcome to the C&J Energy Services Earnings Conference Call. All participants will be in a listen-only mode. (Operator Instructions) Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Mr. Daniel Jenkins, VP of IR. Sir, please go ahead.
Daniel E. Jenkins
Thank you, operator, and good morning, everyone, and welcome to the C&J Energy Services earnings conference call to discuss our results for the third quarter of 2018. With me today are Don Gawick, President and CEO; and Jan Kees van Gaalen, our new CFO who joined us in mid-September. We appreciate your participation.
(Forward-Looking Cautionary Statements)
Our comments today include non-GAAP financial measures. Additional details and a reconciliation to the most directly comparable GAAP financial measures are included in our third quarter earnings press release. As a reminder, today's call is being webcast live, and a replay will be available in the Investor Relations section on our website. Please note that information relayed on this call speaks only as of today, November 1, 2018. So any time sensitive information may no longer be accurate at the time of the replay.
With that said, I'd like to turn the call over to Don Gawick, President and CEO of C&J Energy Services.
Donald Jeffrey Gawick
Thanks, Daniel. Good morning, everyone. Thank you for joining us today to discuss our results for the third quarter of 2018. Before we get started, I wanted to officially welcome and proudly introduce Jan Kees van Gaalen to the C&J community on his first earnings call with us. We are very excited to have such an experienced financial professional join our team, especially as we continue to focus on SAP integration while streamlining our cost structure and creating value for all of our shareholders.
Turning to slides three and four of the preposted presentation and focusing on operational highlights from the third quarter of 2018, I am proud of our operations team and how they performed despite the challenging market conditions. We experienced weakening customer demand that resulted in activity gaps and decreased utilization to varying degrees across our completions-oriented businesses, most significantly in our fracturing business. Our Well Construction and Intervention Services segment performed well during the quarter, due to the stable drilling rig count and continued strong customer demand for large diameter coiled tubing.
We experienced improvement in most of our well support services segment businesses, despite being negatively impacted by weather delays and project startup costs. All of this resulted in revenue and adjusted EBITDA increasing year-over-year by 28% and 66%, respectively. However, revenue and adjusted EBITDA decreased sequentially by 7% and 17%, respectively. In our fracturing business, reduced customer demand resulted in pricing and utilization erosion during the third quarter. In general, our customers slowed their pace of completion activity, in part due to early budget exhaustion, which resulted in frac utilization falling by approximately 10% sequentially.
With the reduction in customer demand and in line with our returns-focused strategy, we idled two horizontal