Quarterly earnings also improved from the adjusted year-ago profit level of 32 cents. The outperformance was mainly attributable to increased activity from fleet additions and higher utilization of existing rigs between periods.
Total revenue grew 28.8% year over year to $354.2 million in the reported quarter, and missed our expectation of $357.0 million.
Dayrates and Utilization
The company’s Gulf of Mexico rigs experienced a dayrate of $127,500 (versus $114,200 in the year-ago quarter), Middle East rigs saw a dayrate of $129,600 (versus $137,600 a year ago) and North Sea rigs’ dayrate was $234,900 (versus $218,600 in the year-ago quarter).
The overall dayrate of all offshore rigs was $153,500 (versus $149,900 in the fourth-quarter 2011). Average utilization of the company’s rig improved to 79% from 68% in the year-earlier quarter.
As of Dec 31, 2012, the cash balance was $1,024.0 million and long-term debt (including current maturities) was $2,009.6 million. The debt-to-capitalization ratio was 30.7% versus 23.7% in the prior quarter.
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.
Recently, the company entered into a three-year contract for the first of the four states of the art drillships. This contributed to a record contract backlog of $3.5 billion at the end of 2012.
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 coming 1 to 3 months. These include Helmerich & Payne, Inc. (HP - Analyst Report), Patterson-UTI Energy Inc. (PTEN - Analyst Report) and Total SA (TOT - Analyst Report) with Zacks Rank #2 (Buy).
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