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Ensco (ESV) Q2 Earnings and Revenues Beat, Decrease Y/Y

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Oil and natural gas driller Ensco plcESV reported diluted second-quarter 2016 earnings of 51 cents a share (excluding one-time items), which surpassed the Zacks Consensus Estimate of 50 cents. The figure, however, decreased from $1.18 a share earned in the year-earlier quarter.

Total revenue decreased to $909.6 million from $1,059.0 million in the year-ago quarter. The top line, however, beat the Zacks Consensus Estimate of $742.0 million.

Segment Performance

Floaters : Revenues from floaters increased 0.3% to $636.4 million in the second quarter from $634.3 million a year ago. The decline was primarily due to lower utilization of several floaters in the U.S. Gulf of Mexico, which in turn, led to a fall in the average day rate to $359,575 from $417,463 a year ago. Reported utilization was 57% as against 76% in the prior-year quarter. Post adjustment of uncontracted rigs and planned downtime, operational utilization was 99% compared with 92% in the year-ago quarter. Floater contract drilling expenses declined 25% to $209 million from $278 million in second-quarter 2015.

Jackups : Revenues from this segment decreased 34.6% to $251.3 million from $384.1 million a year ago. The downside mainly stemmed from fewer rig operating days for several jackups and a decline a in the average day rate to $111,791 from $139,797. Reported utilization was 63% as against 77% a year ago. Post adjustment of uncontracted rigs and planned downtime, operational utilization rose to 99% from 98% a year ago. Contract drilling expenses decreased 37% year over year to $122 million in the second quarter. The decline was partly due to lower compensation, and repair and maintenance expenses.

Other : Revenues decreased significantly to $21.9 million from $40.6 million in second-quarter 2015. Contract drilling expenses fell to $19 million from $32 million a year ago.

ENSCO PLC Price, Consensus and EPS Surprise

ENSCO PLC Price, Consensus and EPS Surprise | ENSCO PLC Quote

Costs and Expenses

Depreciation expenses were $112.4 million compared with $140.5 million in second-quarter 2015. This was mainly due to non-cash asset impairments recorded in fourth quarter 2015. General and administrative expenses declined to $27.4 million from $29.7 million last year, mostly due to disciplined expense management.

Balance Sheet and Capex

At the end of the second quarter, Ensco had $790.3 million in cash and cash equivalents. Long-term debt (including current maturities) was $4,905.6 million, with debt-to-capitalization ratio of 38.3% compared with 40.3% in the year-ago quarter.

Zacks Rank

Ensco currently carries a Zacks Rank #4 (Sell). Some better-ranked players from the energy sector are Sasol Ltd SSL , Dril-Quip, Inc. DRQ and Murphy USA Inc MUSA . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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MURPHY USA INC (MUSA): Free Stock Analysis Report

DRIL-QUIP INC (DRQ): Free Stock Analysis Report

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ENSCO PLC (ESV): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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