Rowan Companies Inc.
) adjusted fourth quarter 2012 earnings from continuing
operations came in at 82 cents per share, beating the Zacks
Consensus Estimate of 49 cents.
Quarterly earnings also improved from the adjusted year-ago
profit level of 32 cents. The outperformance was mainly
attributable to increased activity from fleet additions and
higher utilization of existing rigs between periods.
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Total revenue grew 28.8% year over year to $354.2 million in the
reported quarter, and missed our expectation of $357.0 million.
Dayrates and Utilization
The company's Gulf of Mexico rigs experienced a dayrate of
$127,500 (versus $114,200 in the year-ago quarter), Middle East
rigs saw a dayrate of $129,600 (versus $137,600 a year ago) and
North Sea rigs' dayrate was $234,900 (versus $218,600 in the
The overall dayrate of all offshore rigs was $153,500 (versus
$149,900 in the fourth-quarter 2011). Average utilization of the
company's rig improved to 79% from 68% in the year-earlier
As of Dec 31, 2012, the cash balance was $1,024.0 million and
long-term debt (including current maturities) was $2,009.6
million. The debt-to-capitalization ratio was 30.7% versus 23.7%
in the prior quarter.
Houston, Texas-based Rowan Companies is a provider of
international and domestic contract drilling and aviation
services. During the quarter, the company experienced strong
demand as well as solid dayrates for high-specification jackups
in most of the markets.
Recently, the company entered into a three-year contract for the
first of the four states of the art drillships. This contributed
to a record contract backlog of $3.5 billion at the end of 2012.
Rowan holds a Zacks Rank #3, which is equivalent to a Hold rating
for a period of 1 to 3 months. However, there are other companies
in the oil and gas industry that are expected to perform well in
the coming 1 to 3 months. These include
Helmerich & Payne, Inc.
Patterson-UTI Energy Inc.
) with Zacks Rank #2 (Buy).