Contract drilling services provider
Helmerich & Payne Inc.
) reported strong results for the fourth fiscal quarter of 2013
(three months ended Sep 30, 2013), driven by robust international
land drilling business.
Earnings per share from continuing operations (excluding special
items) came in at $1.44, comfortably surpassing the Zacks
Consensus Estimate of $1.41 and the year-ago adjusted profit of
Revenues of $864.5 million were up 4.2% from the fourth fiscal
quarter 2012 and also came above the Zacks Consensus Estimate of
U.S. Land Operations:
During the quarter, operating revenues totaled $707.9 million
(82% of total revenue), up 1.8% year over year. Average rig
revenue per operating day was $29,058, 2.6% above the year-ago
period. However, utilization levels fell to 82% (from 85% in the
fourth fiscal quarter of 2012), while average rig margin per day
decreased 1.8% to $15,420. The interplay of these factors pulled
down the segment operating income slightly (by 0.3%) from the
year-earlier quarter to $235.8 million.
Helmerich & Payne's offshore revenues were up 2.7% year over
year to $54.7 million. But daily average rig revenue decreased
2.6% to $60,415, while average rig margin per day plummeted 22.9%
to $17,981. This pulled down the segment operating income 14.5%
from the previous year period to $10.3 million, partially offset
by the improvement in rig utilization that went up to 89% for the
period, against 84% a year ago.
International Land Operations:
Helmerich & Payne's international land operations recorded
revenues of $98.5 million, up from $77.7 million in the
previous-year quarter. Average daily rig revenue was $37,113, up
3.9%, while rig margin per day was $10,634, against $8,210 in the
year-ago period. As a result, segment profitability took an
upward trajectory, reaching $13.9 million, compared to $7.1
million in the fourth quarter of fiscal 2012. Moreover, activity
levels rose to 87% from 79% a year ago.
Capital Expenditure & Balance Sheet
During the quarter, Helmerich & Payne spent approximately
$190.5 million on capital programs. As of Sep 30, 2013, the
company had approximately $447.9 million in cash, while long-term
debt stood at $80.0 million (debt-to-capitalization ratio of
Zacks Rank & Stock Picks
Helmerich & Payne currently carries a Zacks Rank #2 (Buy),
implying that it is expected to outperform the broader U.S.
equity market over the next one to three months.
One could also look at
Matador Resources Co.
SM Energy Co.
Abraxas Petroleum Corp.
) as good buying opportunities. These U.S. upstream energy
operators - sporting a Zacks Rank #1 (Strong Buy) - have solid
secular growth stories with the potential to rise significantly
from the current levels.
ABRAXAS PETE/NV (AXAS): Free Stock Analysis
HELMERICH&PAYNE (HP): Free Stock Analysis
MATADOR RESOURC (MTDR): Free Stock Analysis
SM ENERGY CO (SM): Free Stock Analysis Report
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