Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Rowan Companies plc’s (RDC - Analyst Report) adjusted second quarter 2013 earnings from continuing operations came in at 57 cents per share, beating the Zacks Consensus Estimate of 55 cents.

Quarterly earnings also improved from the adjusted year-ago profit level of 41 cents. The growth was mainly attributable to higher average dayrates, increased activity from fleet additions and higher utilization of existing rigs between periods.

Total revenue grew 16.5% year over year to $408.9 million in the reported quarter, and beat our expectation of $399.0 million.

Dayrates and Utilization

The company’s Gulf of Mexico rigs experienced a dayrate of $137,100 (versus $119,100 in the year-ago quarter), Middle East rigs saw a dayrate of $137,700 (versus $130,800 a year ago) and North Sea rigs’ dayrate was $256,800 (versus $234,500 in the year-ago quarter).

The overall dayrate of all offshore rigs was $172,800 (versus $154,000 in second-quarter 2012). Average utilization of the company’s rigs improved to 83% from 79% in the year-earlier quarter.

Financials

As of Jun 30, 2013, the cash balance was $1,005.9 million and long-term debt (including current maturities) was $2,009.2 million. The debt-to-capitalization ratio was 29.9% versus 30.4% 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 operations of newbuild drillships. Rowan expects growing demand and the resultant higher jackup day rates to lead to strong earnings growth.
 
Rowan holds a Zacks Rank #3, which is equivalent to a Hold rating for a period of 1 to 3 months. However, there are other companies in the oil and gas industry that are expected to perform well in the short term. These include Range Resources Corporation (RRC - Analyst Report), Gulfmark Offshore, Inc. (GLF - Snapshot Report) and Dril-Quip, Inc. (DRQ - Analyst Report) with a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%