It has been about a month since the last earnings report for Ensco plc . Shares have lost about 11.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Fourth-Quarter 2016 Results
Ensco plc reported diluted fourth-quarter 2016 earnings of $0.09 a share (excluding one-time items), which surpassed the Zacks Consensus Estimate of $0.05 on higher operational utilization from the floater segment. The figure, however, decreased from $0.92 a share earned in the year-earlier quarter. The year-over-year decline was mainly attributable to lower revenues from the floater and jackups segments.
Total revenue decreased to $504.6 million from $828.3 million in the year-ago quarter. The top line also missed the Zacks Consensus Estimate of $508.69 million.
Segmental Performance
Floaters:Revenues from floaters plunged 38.2% to $302.8 million in the fourth quarter from $490.3 million a year ago. The decline primarily stemmed from fewer rig operating days, which in turn, led to a fall in the average day rate to $358,405 from $397,146 a year ago. Reported utilization was 44% as against 57% in the prior-year quarter. Floater contract drilling expenses declined nearly 37% to $151.4 million from $239.2 million in fourth-quarter 2015.
Jackups: Revenues from this segment decreased 39.3% to $186.5 million from $307.4 million a year ago. The downside mainly stemmed from fewer rig operating days for several jackups and a decline in the average day rate to $101,252 from $125,785. Reported utilization was down to 54% from 66% a year ago. Contract drilling expenses decreased 175% year over year to $126.8 million in the fourth quarter. The decline was partly due to lower compensation, as well as repair and maintenance expenses.
Other:Revenues plunged to $15.3 million from $30.6 million in fourth-quarter 2015. Contract drilling expenses fell to $10.8 million from $26.7 million a year ago.
Costs and Expenses
Depreciation expenses were $110.2 million compared with $149.7 million in fourth-quarter 2015. General and administrative expenses declined to $24.7 million from $30.2 million last year, mainly due to disciplined expense management.
Balance Sheet and Capex
At the end of the fourth quarter, Ensco had $1,159.7 million in cash and cash equivalents. Long-term debt was $4,942.6 million, with debt-to-capitalization ratio of 37.4% compared with 36.9% in the preceding quarter.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been five downward revisions for the current quarter. While looking back an additional 30 days, we can see even more downward movement. There have been seven downward revisions in the last two months. In the past month, the consensus estimate also shifted downward by 277% due to these changes.
VGM Scores
At this time, Ensco's stock has a poor Growth Score of 'F', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is Ensco (ESV) Down 11.2% Since the Last Earnings Report?
It has been about a month since the last earnings report for Ensco plc . Shares have lost about 11.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Fourth-Quarter 2016 Results
Ensco plc reported diluted fourth-quarter 2016 earnings of $0.09 a share (excluding one-time items), which surpassed the Zacks Consensus Estimate of $0.05 on higher operational utilization from the floater segment. The figure, however, decreased from $0.92 a share earned in the year-earlier quarter. The year-over-year decline was mainly attributable to lower revenues from the floater and jackups segments.
Total revenue decreased to $504.6 million from $828.3 million in the year-ago quarter. The top line also missed the Zacks Consensus Estimate of $508.69 million.
Segmental Performance
Floaters:Revenues from floaters plunged 38.2% to $302.8 million in the fourth quarter from $490.3 million a year ago. The decline primarily stemmed from fewer rig operating days, which in turn, led to a fall in the average day rate to $358,405 from $397,146 a year ago. Reported utilization was 44% as against 57% in the prior-year quarter. Floater contract drilling expenses declined nearly 37% to $151.4 million from $239.2 million in fourth-quarter 2015.
Jackups: Revenues from this segment decreased 39.3% to $186.5 million from $307.4 million a year ago. The downside mainly stemmed from fewer rig operating days for several jackups and a decline in the average day rate to $101,252 from $125,785. Reported utilization was down to 54% from 66% a year ago. Contract drilling expenses decreased 175% year over year to $126.8 million in the fourth quarter. The decline was partly due to lower compensation, as well as repair and maintenance expenses.
Other:Revenues plunged to $15.3 million from $30.6 million in fourth-quarter 2015. Contract drilling expenses fell to $10.8 million from $26.7 million a year ago.
Costs and Expenses
Depreciation expenses were $110.2 million compared with $149.7 million in fourth-quarter 2015. General and administrative expenses declined to $24.7 million from $30.2 million last year, mainly due to disciplined expense management.
Balance Sheet and Capex
At the end of the fourth quarter, Ensco had $1,159.7 million in cash and cash equivalents. Long-term debt was $4,942.6 million, with debt-to-capitalization ratio of 37.4% compared with 36.9% in the preceding quarter.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been five downward revisions for the current quarter. While looking back an additional 30 days, we can see even more downward movement. There have been seven downward revisions in the last two months. In the past month, the consensus estimate also shifted downward by 277% due to these changes.
ENSCO PLC Price and Consensus
ENSCO PLC Price and Consensus | ENSCO PLC Quote
VGM Scores
At this time, Ensco's stock has a poor Growth Score of 'F', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.