Rowan Companies plc
) adjusted first quarter 2013 earnings from continuing operations
came in at 55 cents per share, beating the Zacks Consensus
Estimate of 53 cents.
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Quarterly earnings also improved from the adjusted year-ago
profit level of 47 cents. The growth was mainly attributable to
higher average day rates, increased activity from fleet additions
and higher utilization of existing rigs between periods.
Total revenue grew 18% year over year to $394.2 million in the
reported quarter, and beat our expectation of $384.0 million.
Dayrates and Utilization
The company's Gulf of Mexico rigs experienced a dayrate of
$132,500 (versus $118,200 in the year-ago quarter), Middle East
rigs saw a dayrate of $135,400 (versus $145,800 a year ago) and
North Sea rigs' dayrate was $267,200 (versus $227,700 in the
The overall dayrate of all offshore rigs was $173,200 (versus
$156,500 in the first-quarter 2012). Average utilization of the
company's rig improved to 80% from 75% in the year-earlier
As of Mar 31, 2013, the cash balance was $1,019.3 million and
long-term debt (including current maturities) was $2,009.7
million. The debt-to-capitalization ratio was 30.4% versus 30.7%
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.
Going forward, Rowan expects further strengthening in the jack-up
markets, especially demand for high-spec rigs, along with strong
demand and encouraging new fixtures in the ultra-deepwater
markets. To capitalize on this, the company is focused on
improving its operational execution of newbuild drillships. It
believes growing demand leading to higher jack-up day rates would
lead to strong earnings increase.
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
EPL Oil & Gas, Inc.
) with Zacks Rank #1 (Strong Buy).