A month has gone by since the last earnings report for Rowan . Shares have added about 2.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Rowan due for a pullback? 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
Rowan Companies plc reported adjusted second-quarter 2018 loss from continuing operations of 60 cents per share, narrower than the Zacks Consensus Estimate of 93 cents, thanks to the surge in dayrate of deepwater rigs.
However, the quarterly loss came wider than the year-ago quarter loss of 23 cents per share, owing to lower rig utilization.
Total revenues were $241.3 million in the second quarter, down from $320.2 million in the prior-year quarter due to fall in total revenue-producing rig days. On the flip side, the top line beat the Zacks Consensus Estimate of $204 million.
Dayrates and Utilization
The company's deepwater rigs recorded an average dayrate of $929,000, surged from $599,600 in the year-ago quarter. Moreover, jackup rigs saw a dayrate of $131,400, increased from $129,900 in the prior-year quarter.
The overall dayrate of all the rigs was $176,300 compared with $186,000 in second-quarter 2017. Also, average utilization of the company's rigs was 59% compared with 69% in the comparable quarter last year.
Total revenue-producing rig days declined 27.2% year over year to 1,243 in the second quarter.
Total Expenses
In the second quarter, the company reported $301.1 million in total costs, higher than $295.6 million in the year-ago quarter. The primary reason behind the increase in total costs was 4.4% higher direct operating expenses (from $168.8 million to $176.3 million).
Financials
As of Mar 31, 2018, the company's cash balance was $1.1 billion and long-term debt was $2.5 billion. The long-term debt-to-capitalization ratio of the company was 32.4%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -9.13% due to these changes.
VGM Scores
At this time, Rowan has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second 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.
Our style scores indicate that the stock is more suitable for value investors than momentum investors.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Rowan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Rowan (RDC) Up 2.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Rowan . Shares have added about 2.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Rowan due for a pullback? 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
Rowan Companies plc reported adjusted second-quarter 2018 loss from continuing operations of 60 cents per share, narrower than the Zacks Consensus Estimate of 93 cents, thanks to the surge in dayrate of deepwater rigs.
However, the quarterly loss came wider than the year-ago quarter loss of 23 cents per share, owing to lower rig utilization.
Total revenues were $241.3 million in the second quarter, down from $320.2 million in the prior-year quarter due to fall in total revenue-producing rig days. On the flip side, the top line beat the Zacks Consensus Estimate of $204 million.
Dayrates and Utilization
The company's deepwater rigs recorded an average dayrate of $929,000, surged from $599,600 in the year-ago quarter. Moreover, jackup rigs saw a dayrate of $131,400, increased from $129,900 in the prior-year quarter.
The overall dayrate of all the rigs was $176,300 compared with $186,000 in second-quarter 2017. Also, average utilization of the company's rigs was 59% compared with 69% in the comparable quarter last year.
Total revenue-producing rig days declined 27.2% year over year to 1,243 in the second quarter.
Total Expenses
In the second quarter, the company reported $301.1 million in total costs, higher than $295.6 million in the year-ago quarter. The primary reason behind the increase in total costs was 4.4% higher direct operating expenses (from $168.8 million to $176.3 million).
Financials
As of Mar 31, 2018, the company's cash balance was $1.1 billion and long-term debt was $2.5 billion. The long-term debt-to-capitalization ratio of the company was 32.4%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -9.13% due to these changes.
VGM Scores
At this time, Rowan has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second 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.
Our style scores indicate that the stock is more suitable for value investors than momentum investors.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Rowan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.