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Helmerich & Payne (HP) Down 9.1% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Helmerich & Payne (HP - Free Report) . Shares have lost about 9.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Helmerich & Payne due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Helmerich & Payne Q4 Earnings Match Estimates
Helmerich & Payne reported fiscal fourth-quarter 2022 adjusted net income of 45 cents per share, matching the Zacks Consensus Estimate. In the year-ago period, the company had incurred a loss of 62 cents per share. The numbers reflect a significant uptick in activity.
Meanwhile, operating revenues of $631.3 million topped the Zacks Consensus Estimate of $597 million and increased 83.6% from the year-ago level on strong results from the key North America Solutions segment. Precisely, sales from the unit totaled $552.3 million, well ahead of the consensus mark of $509 million.
Segment Performance
North America Solutions: During the quarter, operating revenues of $552.3 million were up 88.3% year over year on higher activity levels, with the average number of active rigs rising from 124 to 176. The steep uptick in drilling works on the back of robust oil and gas prices, together with pricing improvements, meant that the segment turned around from the previous year’s operating loss of $60.7 million to a profit of $92.1 million.
Offshore Gulf of Mexico: Revenues of $34.3 million increased 8.9% from the year-ago quarter as activity remained robust. Moreover, margins during the July-September period of 2022 expanded 22.3% year over year, resulting in the segment’s operating profit surged 45.3% from the prior-year period to $9.4 million.
International Solutions: The segment’s operations generated revenues of $42.4 million, up from $17.3 million in the corresponding period of 2021 — again due to improved activity levels (primarily in Latin America), with the average number of active rigs jumping 83.3% from 6 to 11. The unit reported a loss of $789,000, significantly narrower than the loss of $5.7 million incurred in the corresponding period a year ago. Apart from increased drilling, the International Solutions segment benefited from lower selling, general and administrative expenses.
Financial Position
In the reported quarter, Helmerich & Payne spent $75.9 million on capital programs. As of Sep 30, 2022, the company had $232.1 million in cash and cash equivalents, while long-term debt was $542.6 million (debt-to-capitalization of 16.4%).
Guidance
This Tulsa, OK-based company anticipates operating gross margins in the North America Solutions segment between $250 million and $270 million in the fiscal first quarter. It sees around 181-186 contracted rigs by Dec 31, 2022.
Coming to the Offshore Gulf of Mexico segment, Helmerich & Payne envisions operating gross margins within $8-$10 million for the fiscal first quarter.
Additionally, International Solutions operating gross margins are forecast between $7-$10 million for the current quarter.
For the current fiscal year, Helmerich & Payne still estimates capital outlay within $425-$475 million, while it hopes to shell out some $400 million as depreciation and $195 million in the form of general and administrative expenses.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 27.12% due to these changes.
VGM Scores
Currently, Helmerich & Payne has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Helmerich & Payne has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Helmerich & Payne belongs to the Zacks Oil and Gas - Drilling industry. Another stock from the same industry, Transocean (RIG - Free Report) , has gained 0.5% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Transocean reported revenues of $730 million in the last reported quarter, representing a year-over-year change of +16.6%. EPS of -$0.06 for the same period compares with -$0.19 a year ago.
Transocean is expected to post a loss of $0.17 per share for the current quarter, representing a year-over-year change of +10.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -19.6%.
Transocean has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Helmerich & Payne (HP) Down 9.1% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Helmerich & Payne (HP - Free Report) . Shares have lost about 9.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Helmerich & Payne due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Helmerich & Payne Q4 Earnings Match Estimates
Helmerich & Payne reported fiscal fourth-quarter 2022 adjusted net income of 45 cents per share, matching the Zacks Consensus Estimate. In the year-ago period, the company had incurred a loss of 62 cents per share. The numbers reflect a significant uptick in activity.
Meanwhile, operating revenues of $631.3 million topped the Zacks Consensus Estimate of $597 million and increased 83.6% from the year-ago level on strong results from the key North America Solutions segment. Precisely, sales from the unit totaled $552.3 million, well ahead of the consensus mark of $509 million.
Segment Performance
North America Solutions: During the quarter, operating revenues of $552.3 million were up 88.3% year over year on higher activity levels, with the average number of active rigs rising from 124 to 176. The steep uptick in drilling works on the back of robust oil and gas prices, together with pricing improvements, meant that the segment turned around from the previous year’s operating loss of $60.7 million to a profit of $92.1 million.
Offshore Gulf of Mexico: Revenues of $34.3 million increased 8.9% from the year-ago quarter as activity remained robust. Moreover, margins during the July-September period of 2022 expanded 22.3% year over year, resulting in the segment’s operating profit surged 45.3% from the prior-year period to $9.4 million.
International Solutions: The segment’s operations generated revenues of $42.4 million, up from $17.3 million in the corresponding period of 2021 — again due to improved activity levels (primarily in Latin America), with the average number of active rigs jumping 83.3% from 6 to 11. The unit reported a loss of $789,000, significantly narrower than the loss of $5.7 million incurred in the corresponding period a year ago. Apart from increased drilling, the International Solutions segment benefited from lower selling, general and administrative expenses.
Financial Position
In the reported quarter, Helmerich & Payne spent $75.9 million on capital programs. As of Sep 30, 2022, the company had $232.1 million in cash and cash equivalents, while long-term debt was $542.6 million (debt-to-capitalization of 16.4%).
Guidance
This Tulsa, OK-based company anticipates operating gross margins in the North America Solutions segment between $250 million and $270 million in the fiscal first quarter. It sees around 181-186 contracted rigs by Dec 31, 2022.
Coming to the Offshore Gulf of Mexico segment, Helmerich & Payne envisions operating gross margins within $8-$10 million for the fiscal first quarter.
Additionally, International Solutions operating gross margins are forecast between $7-$10 million for the current quarter.
For the current fiscal year, Helmerich & Payne still estimates capital outlay within $425-$475 million, while it hopes to shell out some $400 million as depreciation and $195 million in the form of general and administrative expenses.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 27.12% due to these changes.
VGM Scores
Currently, Helmerich & Payne has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Helmerich & Payne has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Helmerich & Payne belongs to the Zacks Oil and Gas - Drilling industry. Another stock from the same industry, Transocean (RIG - Free Report) , has gained 0.5% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Transocean reported revenues of $730 million in the last reported quarter, representing a year-over-year change of +16.6%. EPS of -$0.06 for the same period compares with -$0.19 a year ago.
Transocean is expected to post a loss of $0.17 per share for the current quarter, representing a year-over-year change of +10.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -19.6%.
Transocean has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.