We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Helmerich & Payne (HP) Posts Wider-Than-Expected Loss in Q2
Read MoreHide Full Article
Contract drilling services provider Helmerich & Payne Inc. (HP - Free Report) reported net operating loss per share for the second quarter of fiscal 2017 – excluding special items – of 47 cents, wider than the Zacks Consensus Estimate of a loss of 41 cents. The underperformance could be attributed to lower drilling activity, especially in the international markets. The bottom line also compares unfavorably with the year-ago adjusted loss of 24 cents
Revenues of $405 million was down 7.5% from the fiscal first quarter of 2016 but beat the Zacks Consensus Estimate of $391 million.
Helmerich & Payne, Inc. Price, Consensus and EPS Surprise
U.S. Land: During the quarter, operating revenues totaled $331 million (82% of total revenue), down 5.2% year over year. While average rig revenue per operating day was $22,654 – 33.8% below the year-ago period, average rig margin per day was up 10.4% to $15,612. Utilization levels increased to 42% (from 31% in the fiscal first quarter of 2016). However, the segment recorded an operating loss of $30.9 million due to increased operating expenses. In the year-ago quarter, income from the unit was $62.5 million.
Offshore: Helmerich & Payne’s Offshore revenues were up 5.5% year over year to $36.2 million. Daily average rig revenue rose 28.6% to $36,006 and average rig margin per day jumped 47.2% to $10,817. These positive factors led to the segment operating income of $5.9 million, up 79% from the prior-year recorded figure of $3.3 million. However, rig utilization declined to 77% from the year-ago level of 84%.
International Land: Helmerich & Payne’s International Land operations recorded revenues of $34.7 million, down from $51.3 million in the prior-year quarter. Average daily rig revenue was $37,340, up 1.6% from the corresponding period last year, while rig margin per day was $3,691, lower than the $10,487 earned a year ago. Rig utilization was down to 25% compared with 38% in the prior-year quarter. The segment reported an operating loss of $11 million, wider-than-expected loss of $2.3 million in the prior-year quarter.
Capital Expenditure & Balance Sheet
During the quarter, Helmerich & Payne spent approximately $93 million on capital programs. As of Mar 31, 2017, the company had approximately $741.7 million in cash, while long-term debt was $492.4 million (debt-to-capitalization ratio of 10.1%).
Guidance
For the U.S. Land Operations, average rig revenue per day is expected to be roughly $21,000. For Offshore operations, average rig margin per day expected to be approximately $12,500. For International Land Operations, average rig margin per day expected to remain under $4,000.
Zacks Rank & Key Picks
Helmerich & Payne currently carries a Zacks Rank #3 (Hold).
Better-ranked players in the broader industry include Penn Virginia Corporation , Bellatrix Exploration Ltd and Cenovus Energy Inc. (CVE - Free Report) . All the three companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Penn Virginia posted a positive average surprise of 36.67% in the last four quarters.
Bellatrix posted a positive average surprise of 58.54% in the last four quarters.
Cenovus posted a positive average surprise of 74.89% in the last four quarters.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Helmerich & Payne (HP) Posts Wider-Than-Expected Loss in Q2
Contract drilling services provider Helmerich & Payne Inc. (HP - Free Report) reported net operating loss per share for the second quarter of fiscal 2017 – excluding special items – of 47 cents, wider than the Zacks Consensus Estimate of a loss of 41 cents. The underperformance could be attributed to lower drilling activity, especially in the international markets. The bottom line also compares unfavorably with the year-ago adjusted loss of 24 cents
Revenues of $405 million was down 7.5% from the fiscal first quarter of 2016 but beat the Zacks Consensus Estimate of $391 million.
Helmerich & Payne, Inc. Price, Consensus and EPS Surprise
Helmerich & Payne, Inc. Price, Consensus and EPS Surprise | Helmerich & Payne, Inc. Quote
Segment Performance
U.S. Land: During the quarter, operating revenues totaled $331 million (82% of total revenue), down 5.2% year over year. While average rig revenue per operating day was $22,654 – 33.8% below the year-ago period, average rig margin per day was up 10.4% to $15,612. Utilization levels increased to 42% (from 31% in the fiscal first quarter of 2016). However, the segment recorded an operating loss of $30.9 million due to increased operating expenses. In the year-ago quarter, income from the unit was $62.5 million.
Offshore: Helmerich & Payne’s Offshore revenues were up 5.5% year over year to $36.2 million. Daily average rig revenue rose 28.6% to $36,006 and average rig margin per day jumped 47.2% to $10,817. These positive factors led to the segment operating income of $5.9 million, up 79% from the prior-year recorded figure of $3.3 million. However, rig utilization declined to 77% from the year-ago level of 84%.
International Land: Helmerich & Payne’s International Land operations recorded revenues of $34.7 million, down from $51.3 million in the prior-year quarter. Average daily rig revenue was $37,340, up 1.6% from the corresponding period last year, while rig margin per day was $3,691, lower than the $10,487 earned a year ago. Rig utilization was down to 25% compared with 38% in the prior-year quarter. The segment reported an operating loss of $11 million, wider-than-expected loss of $2.3 million in the prior-year quarter.
Capital Expenditure & Balance Sheet
During the quarter, Helmerich & Payne spent approximately $93 million on capital programs. As of Mar 31, 2017, the company had approximately $741.7 million in cash, while long-term debt was $492.4 million (debt-to-capitalization ratio of 10.1%).
Guidance
For the U.S. Land Operations, average rig revenue per day is expected to be roughly $21,000. For Offshore operations, average rig margin per day expected to be approximately $12,500. For International Land Operations, average rig margin per day expected to remain under $4,000.
Zacks Rank & Key Picks
Helmerich & Payne currently carries a Zacks Rank #3 (Hold).
Better-ranked players in the broader industry include Penn Virginia Corporation , Bellatrix Exploration Ltd and Cenovus Energy Inc. (CVE - Free Report) . All the three companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Penn Virginia posted a positive average surprise of 36.67% in the last four quarters.
Bellatrix posted a positive average surprise of 58.54% in the last four quarters.
Cenovus posted a positive average surprise of 74.89% in the last four quarters.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>