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Rowan Earnings In Line with Ests, Revs Up - Analyst Blog

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Rowan Companies plc 's ( RDC ) adjusted fourth quarter 2013 earnings from continuing operations came in at 42 cents per share, at par with the Zacks Consensus Estimate. Quarterly earnings, however, decreased from the adjusted year-ago profit level of 44 cents.

Total revenue grew 11.1% year over year to $393.4 million in the reported quarter and beat our expectation of $388.0 million. The growth was mainly attributable to higher average dayrates, increased activity from fleet additions and higher utilization of existing rigs between periods.

Full-year 2013 adjusted earnings of $2.03 per share increased 38.1% from the year-ago adjusted profit level of $1.47 a share. The results also beat the Zacks Consensus Estimate of $1.95.

Total revenue in 2013 improved 13.4% on a year-over-year basis to $1,579.3 million.

Dayrates and Utilization

The company's Gulf of Mexico rigs experienced a dayrate of $143,400 (versus $127,500 in the year-ago quarter), Middle East rigs saw a dayrate of $135,600 (versus $129,600 a year ago) and North Sea rigs' dayrate was $284,000 (versus $234,900 in the year-ago quarter).

The overall dayrate of all offshore rigs was $168,400 (versus $153,500 in fourth-quarter 2012). Average utilization of the company's rigs improved to 83% from 79% in the year-earlier quarter.

Financials

As of Dec 31, 2013, the cash balance was $1,092.8 million and long-term debt (including current maturities) was $2,008.7 million. The debt-to-capitalization ratio was 29.1% versus 29.6% in the prior quarter.

To Conclude

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 jackup 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 the operation of newbuild drillships. Rowan expects rising demand and the resultant higher jackup day rates to lead to strong earnings growth.

Rowan holds a Zacks Rank #3 (Hold). However, there are other companies in the oil and gas industry that are expected to perform well in the short term. These include Helmerich & Payne, Inc. ( HP ), Matrix Service Company ( MTRX ) and Patterson-UTI Energy Inc. ( PTEN ) with a Zacks Rank #1 (Strong Buy).

HELMERICH&PAYNE (HP): Free Stock Analysis Report

MATRIX SERVICE (MTRX): Free Stock Analysis Report

PATTERSON-UTI (PTEN): Free Stock Analysis Report

ROWAN COS PLC (RDC): 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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