It has been about a month since the last earnings report for Ensco . Shares have lost about 6.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ensco 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 catalysts.
Second-Quarter 2018 Results
Ensco plc reported diluted second-quarter 2018 loss of 30 cents a share, narrower than the Zacks Consensus Estimate of a loss of 33 cents. The company reported a loss of 10 cents in the year-earlier quarter.
Total revenues increased to $458.5 million from $457.5 million in the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $453 million.
The improvement can be attributed to higher utilization as well as lower general and administrative expenses. However, it was partially offset by lower realized dayrates and higher depreciation costs.
Segmental Performance
Floaters: Revenues were $284.9 million compared with $264 million in the prior-year quarter. This upside was primarily driven by the acquisition of Atwood rigs as well as revenues from the activation of ENSCO DS-10.Decline in the average day rate to $237,513 from $338,675 a year ago is another driving factor.
Reported utilization was 53% compared with 43% in the year-ago quarter. Adjusted for uncontracted rigs and planned downtime, operational utilization was 98% compared with 99% in the prior-year quarter.
Jackups: Revenues were $158.7 million compared with $178.9 million in the prior-year quarter. This was due to a decline in average day rates to $78,408 from $88,583 in the prior-year quarter.
Reported utilization was 66% compared with 64% in second-quarter 2017. Adjusted for uncontracted rigs and planned downtime, operational utilization in the reported quarter was 99% as against 98% a year ago.
Other: Revenues increased to $14.9 million from $14.6 million in second-quarter 2017. Contract drilling expenses rose to $13.8 million from $13.4 million in the year-ago quarter.
Costs and Expenses
Depreciation expenses jumped to $120.7 million from $107.9 million in second-quarter 2017. This was due to the inclusion of Atwood rigs and ENSCO DS-10 to the fleet. General and administrative expenses fell to $26.1 million from $30.5 million in the prior-year quarter, mainly due to transaction costs relating to the acquisition of Atwood.
Balance Sheet and Capex
At the end of the second quarter, Ensco had $485.5 million in cash and cash equivalents. Long-term debt (including current maturities) was $4,994.9 million, with net debt-to-capitalization ratio of 37.2%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimate. The consensus estimate has shifted -5.6% due to these changes.
VGM Scores
At this time, Ensco 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 C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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, and the magnitude of these revisions indicates a downward shift. Interestingly, Ensco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Image: Bigstock
Why Is Ensco (ESV) Down 6.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Ensco . Shares have lost about 6.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ensco 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 catalysts.
Second-Quarter 2018 Results
Ensco plc reported diluted second-quarter 2018 loss of 30 cents a share, narrower than the Zacks Consensus Estimate of a loss of 33 cents. The company reported a loss of 10 cents in the year-earlier quarter.
Total revenues increased to $458.5 million from $457.5 million in the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $453 million.
The improvement can be attributed to higher utilization as well as lower general and administrative expenses. However, it was partially offset by lower realized dayrates and higher depreciation costs.
Segmental Performance
Floaters: Revenues were $284.9 million compared with $264 million in the prior-year quarter. This upside was primarily driven by the acquisition of Atwood rigs as well as revenues from the activation of ENSCO DS-10.Decline in the average day rate to $237,513 from $338,675 a year ago is another driving factor.
Reported utilization was 53% compared with 43% in the year-ago quarter. Adjusted for uncontracted rigs and planned downtime, operational utilization was 98% compared with 99% in the prior-year quarter.
Jackups: Revenues were $158.7 million compared with $178.9 million in the prior-year quarter. This was due to a decline in average day rates to $78,408 from $88,583 in the prior-year quarter.
Reported utilization was 66% compared with 64% in second-quarter 2017. Adjusted for uncontracted rigs and planned downtime, operational utilization in the reported quarter was 99% as against 98% a year ago.
Other: Revenues increased to $14.9 million from $14.6 million in second-quarter 2017. Contract drilling expenses rose to $13.8 million from $13.4 million in the year-ago quarter.
Costs and Expenses
Depreciation expenses jumped to $120.7 million from $107.9 million in second-quarter 2017. This was due to the inclusion of Atwood rigs and ENSCO DS-10 to the fleet. General and administrative expenses fell to $26.1 million from $30.5 million in the prior-year quarter, mainly due to transaction costs relating to the acquisition of Atwood.
Balance Sheet and Capex
At the end of the second quarter, Ensco had $485.5 million in cash and cash equivalents. Long-term debt (including current maturities) was $4,994.9 million, with net debt-to-capitalization ratio of 37.2%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimate. The consensus estimate has shifted -5.6% due to these changes.
VGM Scores
At this time, Ensco 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 C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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, and the magnitude of these revisions indicates a downward shift. Interestingly, Ensco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.