ChampionX Earnings: Cost Management Drives Profitability Amid Weaker End Market Demand

ChampionX had a decent second quarter despite tepid North American production activity. Despite a 4% year-over-year decline in sales, the firm managed to increase its adjusted EBTIDA margin by 40 basis points to 20.5%. Nimble cost management accounted for most of the gain, and while further significant expansions are unlikely, we expect ChampionX will maintain a similar margin profile through year-end. We maintain our $44 fair value estimate and no-moat rating following results.