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Rowan Companies Beats Q1 Earnings & Revenue Estimates - Analyst Blog

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Rowan Companies plc 's RDC adjusted first-quarter 2015 earnings from continuing operations came in at 99 cents per share, beating the Zacks Consensus Estimate of 72 cents. Quarterly earnings, also increased from the adjusted year-ago profit level of 28 cents.

Total revenue increased 44.9% year over year to $547.0 million in the reported quarter and surpassed the Zacks Consensus Estimate of $532.0 million.

Dayrates and Utilization

The company's Gulf of Mexico rigs experienced a dayrate of $115,400 (versus $153,600 in the year-ago quarter), the Middle East rigs saw a dayrate of $138,500 (versus $136,000 in the prior-year quarter) and North Sea rigs' dayrate was $295,800 (versus $273,600 in the year-earlier quarter).

The overall dayrate of all jack-up rigs was $180,200 (versus $171,400 in first-quarter 2014). Average utilization of the company's rig was 90% versus 85% in the year-earlier quarter.

Financials

As of Mar 31, 2015, the company's cash balance was $56.8 million and long-term debt (including current maturities) was $2,807.1 million. The debt-to-capitalization ratio was 36.2% versus 35.5% in the prior quarter.

Conclusion

Houston, TX-based Rowan Companies is a provider of international and domestic contract drilling and aviation services. During the quarter, the company experienced strong demand for its high-specification jackups and ultra deepwater drillships in most of its markets.

Going forward, Rowan Companies intends to gain more strength in the jackup markets, given the strong demand for high-spec rigs, along with the growing demand and encouraging new fixtures in the ultra-deepwater markets. To capitalize on these factors, the company is focused on improving its operational execution of newbuild drillships. It believes that demand growth will lead to higher jackup day rates, which would result in earnings power.

Currently, Rowan Companies has a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector are Sprague Resources LP SRLP , Suburban Propane Partners LP SPH and Independence Contract Drilling Inc. ICD . All these stocks sport a Zacks Rank #1 (Strong Buy).

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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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