On Apr 9, Zacks Investment Research upgraded contract drilling
services provider Helmerich & Payne Inc. ( HP ) to a Zacks
Rank #2 (Buy).CONTL RESOURCES (CLR): Free Stock Analysis
ReportCRIMSON EXPLOR (CXPO): Free Stock Analysis
ReportHELMERICH&PAYNE (HP): Free Stock Analysis
ReportPLAINS EXPL&PRD (PXP): Free Stock Analysis
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Why the Upgrade?
Helmerich & Payne has been witnessing rising earnings
estimates owing to impressive first quarter fiscal 2013 (three
months ended Dec 31, 2012) results that were backed by better
drilling activities and innovative technological
On Jan 31, 2013, the company reported earnings per share from
continuing operations (excluding special items) of $1.40,
surpassing the Zacks Consensus Estimate of $1.29. Compared with the
year-ago adjusted profit, the results increased 8.5% from
Revenues were $844.6 million, up 15.3% from the first quarter of
fiscal 2012. The top line also surpassed our projection of $823.0
With respect to the earnings trend, Helmerich & Payne
delivered positive earnings surprises in 3 of the last 4 quarters
with an average beat of 7.68%. Moreover, the company has been
retaining shareholders' confidence by returning wealth via share
repurchases and dividend hikes. It has increased its quarterly
common stock dividend by more than 100% to 15 cents per share (60
cents per share annualized).
Based on Helmerich & Payne's consistency in earnings,
attractive fundamentals and a positive outlook, the Zacks Consensus
Estimate for the second quarter of fiscal 2013 has increased 2.4%
to $1.28 per share over the last 60 days. For fiscal 2013, the
Zacks Consensus Estimate has increased 3.09% over the same
timeframe to $5.34 per share.
The long-term expected earnings and sales growth projections of
6.25% and 11.69%, respectively, are also fairly impressive.
We believe Helmerich & Payne's technologically advanced
FlexRigs is the key to its success, helping to increase its count
of active rigs and maintain relatively strong daily-rate margins
even during times of market uncertainty.
Other Stocks to Consider
There are other firms in the energy sector that are also
performing well and are worth considering. These include Zacks
Ranked #2 Continental Resources Inc. ( CLR ), Crimson
Exploration Inc. ( CXPO ) and
Plains Exploration & Production Company ( PXP ).