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Helmerich & Payne (HP) Q2 Earnings and Revenues Top Estimates
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Helmerich & Payne (HP - Free Report) reported second-quarter fiscal 2024 adjusted net income of 86 cents per share, which marginally beat the Zacks Consensus Estimate of 85 cents. Operating profit from the International Solutions unit totaled $3.6 million, which beat the consensus estimate of a loss of $1.6 million. However, the bottom line was below the year-ago quarter’s reported figure of $1.26. This was primarily due to the poor performance of the company's segments.
Operating revenues of $687.9 million outpaced the Zacks Consensus Estimate of $680 million. Sales from the North America Solutions unit totaled $613.3 million, which beat the consensus mark of $601 million. However, the figure decreased 10.6% from the year-ago quarter’s level.
In good news for investors, Helmerich & Payne is using the excess cash from a supportive environment to reward investors with dividends and buybacks. HP’s board of directors declared a quarterly cash dividend of 25 cents per share to its common shareholders of record as of May 17. The payout will be made on May 31. In addition to the regular dividend, HP declared a supplemental cash dividend of 17 cents per share.
In the second quarter, the company distributed roughly $46 million to its shareholders through a combination of dividends and stock buybacks. This included $25 million in regular dividends, $17 million in special dividends and $4 million used to repurchase shares.
Helmerich & Payne, Inc. Price, Consensus and EPS Surprise
North America Solutions: Operating revenues of $613.3 million were down 9.2% year over year on lower activity levels, with the average number of active rigs at 155. The top line beat our projection of $591.7 million.
Operating profit totaled $147.1 million compared with $182.1 million in the prior-year period. The reported figure missed our estimate of $166 million. The decline in drilling activity levels during the quarter can be attributed to this underperformance.
Offshore Gulf of Mexico: Revenues of $25.9 million decreased 26% from the year-ago quarter’s level of $35 million. The top line also missed our projection of $26.7 million.
Operating profit totaled $78,000, down 98.8% from that recorded in the prior-year period. The figure also missed our estimate of $3.8 million.
International Solutions: Sales in this segment decreased 17.9% from the year-ago quarter’s level of $55.9 million. The figure also missed our projection of $53.7 million.
Operating profit totaled $3.6 million compared with $4 million in the prior-year quarter. The figure also exceeded our projection of a loss of $2,000.
Financial Position
In the reported quarter, HP spent $254.7 million on capital programs. As of Mar 31, 2024, the company had $193.6 million in cash and cash equivalents, while the long-term debt totaled $545.4 million (debt-to-capitalization of 16.3%).
Guidance
For the third quarter of fiscal 2024, Helmerich & Payne expects operating gross margin to be in the range of $255-$275 million and $5-$8 million for North America Solutions and Offshore Gulf of Mexico, respectively. The company expects to exit the quarter with approximately 145-151 contracted rigs from North America Solutions.
HP expects International Solutions' direct margins to fall within the range of negative $2 million to $2 million, excluding any gains or losses from foreign exchange, but including around $10-$12 million for rig preparation and start-up expenses linked to operations in Saudi Arabia.
Helmerich & Payne estimates a $500 million capital outlay in 2024. The company projects depreciation and amortization expenses of $405 million, and research and development expenses of $37 million during the year. General and administrative expenses are anticipated to be $240 million. Cash taxes are projected to be in the $150-$200 million range.
Hess Corporation is valued at approximately $49.03 billion. In the past year, the company’s shares have surged 14%.
HES is a leading oil and natural gas exploration and production company. The upstream energy player primarily operates in the prolific offshore Guyana resources.
SM Energy is valued at $5.79 billion. The company currently pays a dividend of 72 cents per share, or 1.44% on an annual basis.
SM engages in the acquisition, exploration, development and production of oil, gas and natural gas liquids in the state of Texas.
Sunoco is valued at $5.69 billion. It is a major wholesale motor fuel distributor in the United States, distributing over 10 fuel brands through long-term contracts with more than 10,000 convenience stores, thereby ensuring consistent cash flow.
SUN’s extensive distribution network across 40 states provides a robust and reliable source of income, and the Brownsville terminal expansion should add to its revenue diversification.
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Helmerich & Payne (HP) Q2 Earnings and Revenues Top Estimates
Helmerich & Payne (HP - Free Report) reported second-quarter fiscal 2024 adjusted net income of 86 cents per share, which marginally beat the Zacks Consensus Estimate of 85 cents. Operating profit from the International Solutions unit totaled $3.6 million, which beat the consensus estimate of a loss of $1.6 million. However, the bottom line was below the year-ago quarter’s reported figure of $1.26. This was primarily due to the poor performance of the company's segments.
Operating revenues of $687.9 million outpaced the Zacks Consensus Estimate of $680 million. Sales from the North America Solutions unit totaled $613.3 million, which beat the consensus mark of $601 million. However, the figure decreased 10.6% from the year-ago quarter’s level.
In good news for investors, Helmerich & Payne is using the excess cash from a supportive environment to reward investors with dividends and buybacks. HP’s board of directors declared a quarterly cash dividend of 25 cents per share to its common shareholders of record as of May 17. The payout will be made on May 31. In addition to the regular dividend, HP declared a supplemental cash dividend of 17 cents per share.
In the second quarter, the company distributed roughly $46 million to its shareholders through a combination of dividends and stock buybacks. This included $25 million in regular dividends, $17 million in special dividends and $4 million used to repurchase shares.
Helmerich & Payne, Inc. Price, Consensus and EPS Surprise
Helmerich & Payne, Inc. price-consensus-eps-surprise-chart | Helmerich & Payne, Inc. Quote
Segmental Performance
North America Solutions: Operating revenues of $613.3 million were down 9.2% year over year on lower activity levels, with the average number of active rigs at 155. The top line beat our projection of $591.7 million.
Operating profit totaled $147.1 million compared with $182.1 million in the prior-year period. The reported figure missed our estimate of $166 million. The decline in drilling activity levels during the quarter can be attributed to this underperformance.
Offshore Gulf of Mexico: Revenues of $25.9 million decreased 26% from the year-ago quarter’s level of $35 million. The top line also missed our projection of $26.7 million.
Operating profit totaled $78,000, down 98.8% from that recorded in the prior-year period. The figure also missed our estimate of $3.8 million.
International Solutions: Sales in this segment decreased 17.9% from the year-ago quarter’s level of $55.9 million. The figure also missed our projection of $53.7 million.
Operating profit totaled $3.6 million compared with $4 million in the prior-year quarter. The figure also exceeded our projection of a loss of $2,000.
Financial Position
In the reported quarter, HP spent $254.7 million on capital programs. As of Mar 31, 2024, the company had $193.6 million in cash and cash equivalents, while the long-term debt totaled $545.4 million (debt-to-capitalization of 16.3%).
Guidance
For the third quarter of fiscal 2024, Helmerich & Payne expects operating gross margin to be in the range of $255-$275 million and $5-$8 million for North America Solutions and Offshore Gulf of Mexico, respectively. The company expects to exit the quarter with approximately 145-151 contracted rigs from North America Solutions.
HP expects International Solutions' direct margins to fall within the range of negative $2 million to $2 million, excluding any gains or losses from foreign exchange, but including around $10-$12 million for rig preparation and start-up expenses linked to operations in Saudi Arabia.
Helmerich & Payne estimates a $500 million capital outlay in 2024. The company projects depreciation and amortization expenses of $405 million, and research and development expenses of $37 million during the year. General and administrative expenses are anticipated to be $240 million. Cash taxes are projected to be in the $150-$200 million range.
Zacks Rank and Key Picks
Currently, HP carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like Hess Corporation (HES - Free Report) and SM Energy Company (SM - Free Report) , each sporting a Zacks #1 Rank (Strong Buy), and Sunoco LP (SUN - Free Report) , carrying a Zacks #2 Rank (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Hess Corporation is valued at approximately $49.03 billion. In the past year, the company’s shares have surged 14%.
HES is a leading oil and natural gas exploration and production company. The upstream energy player primarily operates in the prolific offshore Guyana resources.
SM Energy is valued at $5.79 billion. The company currently pays a dividend of 72 cents per share, or 1.44% on an annual basis.
SM engages in the acquisition, exploration, development and production of oil, gas and natural gas liquids in the state of Texas.
Sunoco is valued at $5.69 billion. It is a major wholesale motor fuel distributor in the United States, distributing over 10 fuel brands through long-term contracts with more than 10,000 convenience stores, thereby ensuring consistent cash flow.
SUN’s extensive distribution network across 40 states provides a robust and reliable source of income, and the Brownsville terminal expansion should add to its revenue diversification.