Oilfield equipment specialist RPC Inc., whose activity is centered in the United States, reported a 17%-plus jump in revenue from a year ago on higher activity levels and a larger fleet of equipment, the Atlanta-based operator said Wednesday.

“Oilfield activity improved moderately during the second quarter of 2018, as favorable oil prices supported our customers’ drilling and completion activities,” said CEO Richard Hubbell.

Although encouraged by the latest quarter’s operational performance, he warned that “increasing competition has limited the ability of oilfield service companies to raise prices at the present time. Given the current operating environment, we have no plans at this time to order additional pressure pumping equipment.”

Hubbell also addressed “industry’s concerns regarding potential Permian Basin takeaway capacity constraints, as oil production may temporarily exceed the region’s capacity to transport oil to regional refineries.”

RPC has not yet experienced any reductions in activity in the Permian, but the basin is “our largest market and a reduction in our customers’ activities in that region represents a risk to our near-term financial results.”

Because RPC operates in several basins in the United States, the company is prepared to “reposition equipment and personnel temporarily to other operating basins should conditions warrant,” Hubbell said.

RPC’s cost of revenue in 2Q2018 totaled $312.1 million, or 66.7%, compared with year-ago costs of $254 million, or 63.7%. Increased costs were attributed mostly to higher employment costs and materials/supplies expenses. Cost of revenues as a percentage of revenues also increased because of the job mix and higher fuel prices.

Selling, general and administrative expenses came in at $42.5 million in 2Q2018 from $40.3 million a year ago. As a percentage of revenues, expenses decreased to 9.1% versus 10.1%.

RPC manages two operating segments, technical services and support services.

Technical services use people and equipment to perform completion, production and maintenance services directly to a customer’s well, while support services provide equipment for customer use.

Technical services revenues increased year/year (y/y) by 16.7% on “higher activity levels and a larger active fleet of revenue-producing equipment as compared to the prior year, particularly within our pressure pumping service line, which is the largest service line,” management said. On a sequential basis, technical services revenues jumped by 7.3%.

Support services revenues climbed 35.4% y/y primarily on “improved activity levels and pricing in the rental tool service line, which is the largest service line within this segment,” noted management. On a sequential basis, revenues increased by 4.6%.

Net income increased to nearly $60 million (28 cents/share) in the latest quarter from $43.8 million (20 cents) a year ago. Revenue totaled almost $468 million, versus nearly $399 million in 2Q2017, with operating profits up 12% to $75 million.