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Helmerich & Payne (HP) Q3 Earnings and Sales Beat Estimates
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Helmerich & Payne, Inc. (HP - Free Report) reported a fiscal third-quarter 2024 adjusted net income of 92 cents per share, which beat the Zacks Consensus Estimate of 77 cents. The outperformance signifies an improvement in the company's Offshore Gulf of Mexico Segment performance. However, the bottom line was below the year-ago quarter’s reported figure of $1.09. This was primarily due to the poor performance of the company's International Solutions and North America Solutions segments.
Operating revenues of $697.7 million outpaced the Zacks Consensus Estimate of $669 million. Sales from the Drilling Services totaled $695 million, which beat the consensus mark of $664 million. However, the figure decreased 3.6% from the year-ago quarter’s level.
In good news for investors, Helmerich & Payne is using the excess cash from a supportive environment to reward its investors with dividends and buybacks. HP’s board of directors declared a quarterly cash dividend of 25 cents per share to its common shareholders of record as of Aug 16. The payout will be made on Aug 30.
In addition to the regular dividend, HP declared a supplemental cash dividend of 17 cents per share. In the third quarter, the company returned an additional $42 million to its shareholders through base and supplemental dividends.
Helmerich & Payne, Inc. Price, Consensus and EPS Surprise
North America Solutions: Operating revenues of $620 million were down 3.1% year over year on lower activity levels, with the average number of active rigs at 150. The top line beat our projection of $591.6 million.
Operating profit totaled $163.4 million compared with $169.5 million in the prior-year period. The decline in drilling activity levels was due to this underperformance. However, the reported figure beat our estimate of $122 million.
International Solutions: Operating revenues of $47.9 million decreased 1.6% from the year-ago quarter’s level of $48.7 million. However, the top line beat our projection of $46.1 million.
Operating loss reached $4.8 million, a 246.7% increase from that recorded in the prior-year period. The figure also missed our projection of a profit of $0.6 million.
Offshore Gulf of Mexico: Revenues of $27.2 million decreased 12.8% from the year-ago quarter’s level of $31.2 million. However, the top line beat our projection of $25.6 million.
Operating profit totaled $5 million, up 6.5% from that recorded in the prior-year period. The figure also beat our estimate of $2.8 million.
Financial Position
In the reported quarter, this Zacks Rank #4 (Sell) company spent $389.1 million on capital programs. As of Jun 30, 2024, the company had $203.6 million in cash and cash equivalents, while the long-term debt totaled $545.6 million (debt-to-capitalization of 16%). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Guidance
In the fourth quarter of fiscal 2024, Helmerich & Payne expects operating gross margin to be in the range of $260-$280 million and $6-$8 million for North America Solutions and Offshore Gulf of Mexico, respectively. The company anticipates ending the quarter with 147-153 contracted rigs for North America Solutions.
HP expects International Solutions' direct margins to be between $(2) million and $2 million, exclusive of any foreign exchange gains or losses. The company projects that International Solutions' direct margins in the fourth fiscal quarter will include $6-$8 million in rig preparation and start-up expenses related to Saudi Arabia operations. This is higher than previous guidance due to some costs being shifted from the third fiscal quarter into the fourth fiscal quarter. The company also expects offshore Gulf of Mexico direct margins to be in the band of $6-$8 million.
Helmerich & Payne estimates a capital outlay of $500 million for fiscal year 2024. The company anticipates that ongoing asset sales, including reimbursements for lost and damaged tubulars and sales of other used drilling equipment, will offset a portion of these expenditures and are projected to total $45 million for the same period.
The company expects depreciation and amortization expenses of $400 million and research and development expenses of $40 million. General and administrative expenses are anticipated to be $250 million. Cash taxes are anticipated to be in the $150-$200 million range.
Important Energy Earnings So Far
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter discounted cash flow (DCF) was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter-end. For the full year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.
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Helmerich & Payne (HP) Q3 Earnings and Sales Beat Estimates
Helmerich & Payne, Inc. (HP - Free Report) reported a fiscal third-quarter 2024 adjusted net income of 92 cents per share, which beat the Zacks Consensus Estimate of 77 cents. The outperformance signifies an improvement in the company's Offshore Gulf of Mexico Segment performance. However, the bottom line was below the year-ago quarter’s reported figure of $1.09. This was primarily due to the poor performance of the company's International Solutions and North America Solutions segments.
Operating revenues of $697.7 million outpaced the Zacks Consensus Estimate of $669 million. Sales from the Drilling Services totaled $695 million, which beat the consensus mark of $664 million. However, the figure decreased 3.6% from the year-ago quarter’s level.
In good news for investors, Helmerich & Payne is using the excess cash from a supportive environment to reward its investors with dividends and buybacks. HP’s board of directors declared a quarterly cash dividend of 25 cents per share to its common shareholders of record as of Aug 16. The payout will be made on Aug 30.
In addition to the regular dividend, HP declared a supplemental cash dividend of 17 cents per share. In the third quarter, the company returned an additional $42 million to its shareholders through base and supplemental dividends.
Helmerich & Payne, Inc. Price, Consensus and EPS Surprise
Helmerich & Payne, Inc. price-consensus-eps-surprise-chart | Helmerich & Payne, Inc. Quote
Segmental Performance
North America Solutions: Operating revenues of $620 million were down 3.1% year over year on lower activity levels, with the average number of active rigs at 150. The top line beat our projection of $591.6 million.
Operating profit totaled $163.4 million compared with $169.5 million in the prior-year period. The decline in drilling activity levels was due to this underperformance. However, the reported figure beat our estimate of $122 million.
International Solutions: Operating revenues of $47.9 million decreased 1.6% from the year-ago quarter’s level of $48.7 million. However, the top line beat our projection of $46.1 million.
Operating loss reached $4.8 million, a 246.7% increase from that recorded in the prior-year period. The figure also missed our projection of a profit of $0.6 million.
Offshore Gulf of Mexico: Revenues of $27.2 million decreased 12.8% from the year-ago quarter’s level of $31.2 million. However, the top line beat our projection of $25.6 million.
Operating profit totaled $5 million, up 6.5% from that recorded in the prior-year period. The figure also beat our estimate of $2.8 million.
Financial Position
In the reported quarter, this Zacks Rank #4 (Sell) company spent $389.1 million on capital programs. As of Jun 30, 2024, the company had $203.6 million in cash and cash equivalents, while the long-term debt totaled $545.6 million (debt-to-capitalization of 16%). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Guidance
In the fourth quarter of fiscal 2024, Helmerich & Payne expects operating gross margin to be in the range of $260-$280 million and $6-$8 million for North America Solutions and Offshore Gulf of Mexico, respectively. The company anticipates ending the quarter with 147-153 contracted rigs for North America Solutions.
HP expects International Solutions' direct margins to be between $(2) million and $2 million, exclusive of any foreign exchange gains or losses. The company projects that International Solutions' direct margins in the fourth fiscal quarter will include $6-$8 million in rig preparation and start-up expenses related to Saudi Arabia operations. This is higher than previous guidance due to some costs being shifted from the third fiscal quarter into the fourth fiscal quarter. The company also expects offshore Gulf of Mexico direct margins to be in the band of $6-$8 million.
Helmerich & Payne estimates a capital outlay of $500 million for fiscal year 2024. The company anticipates that ongoing asset sales, including reimbursements for lost and damaged tubulars and sales of other used drilling equipment, will offset a portion of these expenditures and are projected to total $45 million for the same period.
The company expects depreciation and amortization expenses of $400 million and research and development expenses of $40 million. General and administrative expenses are anticipated to be $250 million. Cash taxes are anticipated to be in the $150-$200 million range.
Important Energy Earnings So Far
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter discounted cash flow (DCF) was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter-end. For the full year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.