Helmerich & Payne

Helmerich & Payne, Inc. (HP - Analyst Report), a Zacks #1 Rank (“strong buy”) company, posted record net income of $125.4 million for the third quarter, compared to the previous year’s $115.2 million. The oil & gas driller missed Wall Street earnings expectations only once over the past five consecutive quarters and, on average, was 5.6% ahead of the estimates during those quarters.

Company Description

Helmerich & Payne, Inc. is primarily a contract drilling company, engaging in the contract drilling of oil and gas wells in the United States and internationally. The company provides drilling rigs, equipment, personnel, and camps on a contract basis to explore for and develop oil and gas from onshore areas and from fixed platforms, tension-leg platforms, and spars in offshore areas.

Quarterly Results Reflect Growth

The company released its fiscal third-quarter report in late July. The results included record net income of $125.4 million, compared to the previous year’s $115.2 million. The oil & gas driller missed Wall Street earnings expectations only once over the past five consecutive quarters and, on average, was 5.6% ahead of the estimates during those quarters.

Helmerich & Payne said, since its last announcement in late May, it signed 18 long-term contracts with eight exploration and production companies to operate 18 new FlexRigs(R)*. Since the beginning of this fiscal year, HP announced 50 new contracts for the construction and operation of 50 new FlexRigs under long-term contracts with firm term durations of three years or greater. This makes 127 long-term commitments for new FlexRigs that have been announced by HP since March, 2005. To date, 95 of the 127 new builds have been completed, with the remaining 32 scheduled for completion by the end of fiscal 2009.

C.E.O. Hans Helmerich stated that quarterly results in U.S. land rig operations and the announcement of 18 more new build orders further validate the company's leadership in implementing new technology in the field. “We believe that as FlexRigs continue to meet and exceed expectations in the field and bring meaningful value to our customers with safer and lower cost wells, demand for both the FlexRig and the organizational competence H&P delivers, will provide more opportunities for growth in both our U.S. and international operations," Helmerich added.

Consensus Estimate are Higher

All 7 covering analysts boosted earnings projections for the year ending September 2008. Forecasts of $4.22 per share are above last month’s $4.07. For the following year, 8 of 9 covering analysts have estimates pegged at $5.30 per share, versus last months’ $5.13. One of those analysts further bumped the projection up to $5.31.

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