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Ensco (ESV) Surpasses Q2 Earnings and Revenue Estimates

Ensco plcESV reported diluted second-quarter 2018 loss of 30 cents a share, narrower than the Zacks Consensus Estimate of a loss of 33 cents. The company reported a loss of 10 cents in the year-earlier quarter.

Ensco plc Price, Consensus and EPS Surprise

Ensco plc Price, Consensus and EPS Surprise | Ensco plc Quote

Total revenues increased to $458.5 million from $457.5 million in the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $453 million.

The improvement can be attributed to higher utilization as well as lower general and administrative expenses. However, it was partially offset by lower realized dayrates and higher depreciation costs.

Segmental Performance

Floaters : Revenues were $284.9 million compared with $264 million in the prior-year quarter. This upside was primarily driven by the acquisition of Atwood rigs as well as revenues from the activation of ENSCO DS-10.Decline in the average day rate to $237,513 from $338,675 a year ago is another driving factor.

Reported utilization was 53% compared with 43% in the year-ago quarter. Adjusted for uncontracted rigs and planned downtime, operational utilization was 98% compared with 99% in the prior-year quarter.

Jackups : Revenues were $158.7 million compared with $178.9 million in the prior-year quarter. This was due to a decline in average day rates to $78,408 from $88,583 in the prior-year quarter.

Reported utilization was 66% compared with 64% in second-quarter 2017. Adjusted for uncontracted rigs and planned downtime, operational utilization in the reported quarter was 99% as against 98% a year ago.

Other : Revenues increased to $14.9 million from $14.6 million in second-quarter 2017. Contract drilling expenses rose to $13.8 million from $13.4 million in the year-ago quarter.

Costs and Expenses

Depreciation expenses jumped to $120.7 million from $107.9 million in second-quarter 2017. This was due to the inclusion of Atwood rigs and ENSCO DS-10 to the fleet. General and administrative expenses fell to $26.1 million from $30.5 million in the prior-year quarter, mainly due to transaction costs relating to the acquisition of Atwood.

Balance Sheet and Capex

At the end of the second quarter, Ensco had $485.5 million in cash and cash equivalents. Long-term debt (including current maturities) was $4,994.9 million, with net debt-to-capitalization ratio of 37.2%.

Q2 Price Performance

During the second quarter, Ensco's shares gained 65.4% compared with the industry 's 19.4% rise.

Zacks Rank & Stocks to Consider

Currently, Ensco carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are ConocoPhillips COP and China Petroleum and Chemical Corporation SNP , also known as Sinopec, and CVR Refining, LP CVRR . All these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

ConocoPhillips, based in Houston, TX, is a major global exploration and production (E&P) company. It pulled off an average positive earnings surprise of 226.9% in the last four quarters.

Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company delivered an average positive earnings surprise of 492.8% in the trailing four quarters.

Sugar Land, TX-based CVR Refining is an independent downstream energy partnership with refining and associated logistics properties in the Midcontinent United States. The company delivered an average positive earnings surprise of 7.05% in the last four quarters.

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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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