Oil and natural gas driller Ensco plc reported diluted second-quarter 2016 earnings of 51 cents a share (excluding one-time items), which surpassed the Zacks Consensus Estimate of 50 cents. The figure, however, decreased from $1.18 a share earned in the year-earlier quarter.
Total revenue decreased to $909.6 million from $1,059.0 million in the year-ago quarter. The top line, however, beat the Zacks Consensus Estimate of $742.0 million.
Segment Performance
Floaters: Revenues from floaters increased 0.3% to $636.4 million in the second quarter from $634.3 million a year ago. The decline was primarily due to lower utilization of several floaters in the U.S. Gulf of Mexico, which in turn, led to a fall in the average day rate to $359,575 from $417,463 a year ago. Reported utilization was 57% as against 76% in the prior-year quarter. Post adjustment of uncontracted rigs and planned downtime, operational utilization was 99% compared with 92% in the year-ago quarter. Floater contract drilling expenses declined 25% to $209 million from $278 million in second-quarter 2015.
Jackups: Revenues from this segment decreased 34.6% to $251.3 million from $384.1 million a year ago. The downside mainly stemmed from fewer rig operating days for several jackups and a decline a in the average day rate to $111,791 from $139,797. Reported utilization was 63% as against 77% a year ago. Post adjustment of uncontracted rigs and planned downtime, operational utilization rose to 99% from 98% a year ago. Contract drilling expenses decreased 37% year over year to $122 million in the second quarter. The decline was partly due to lower compensation, and repair and maintenance expenses.
Other: Revenues decreased significantly to $21.9 million from $40.6 million in second-quarter 2015. Contract drilling expenses fell to $19 million from $32 million a year ago.
Costs and Expenses
Depreciation expenses were $112.4 million compared with $140.5 million in second-quarter 2015. This was mainly due to non-cash asset impairments recorded in fourth quarter 2015. General and administrative expenses declined to $27.4 million from $29.7 million last year, mostly due to disciplined expense management.
Balance Sheet and Capex
At the end of the second quarter, Ensco had $790.3 million in cash and cash equivalents. Long-term debt (including current maturities) was $4,905.6 million, with debt-to-capitalization ratio of 38.3% compared with 40.3% in the year-ago quarter.
Zacks Rank
Ensco currently carries a Zacks Rank #4 (Sell). Some better-ranked players from the energy sector are Sasol Ltd (SSL - Free Report) , Dril-Quip, Inc. (DRQ - Free Report) and Murphy USA Inc (MUSA - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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Oil and natural gas driller Ensco plc reported diluted second-quarter 2016 earnings of 51 cents a share (excluding one-time items), which surpassed the Zacks Consensus Estimate of 50 cents. The figure, however, decreased from $1.18 a share earned in the year-earlier quarter.
Total revenue decreased to $909.6 million from $1,059.0 million in the year-ago quarter. The top line, however, beat the Zacks Consensus Estimate of $742.0 million.
Segment Performance
Floaters: Revenues from floaters increased 0.3% to $636.4 million in the second quarter from $634.3 million a year ago. The decline was primarily due to lower utilization of several floaters in the U.S. Gulf of Mexico, which in turn, led to a fall in the average day rate to $359,575 from $417,463 a year ago. Reported utilization was 57% as against 76% in the prior-year quarter. Post adjustment of uncontracted rigs and planned downtime, operational utilization was 99% compared with 92% in the year-ago quarter. Floater contract drilling expenses declined 25% to $209 million from $278 million in second-quarter 2015.
Jackups: Revenues from this segment decreased 34.6% to $251.3 million from $384.1 million a year ago. The downside mainly stemmed from fewer rig operating days for several jackups and a decline a in the average day rate to $111,791 from $139,797. Reported utilization was 63% as against 77% a year ago. Post adjustment of uncontracted rigs and planned downtime, operational utilization rose to 99% from 98% a year ago. Contract drilling expenses decreased 37% year over year to $122 million in the second quarter. The decline was partly due to lower compensation, and repair and maintenance expenses.
Other: Revenues decreased significantly to $21.9 million from $40.6 million in second-quarter 2015. Contract drilling expenses fell to $19 million from $32 million a year ago.
Costs and Expenses
Depreciation expenses were $112.4 million compared with $140.5 million in second-quarter 2015. This was mainly due to non-cash asset impairments recorded in fourth quarter 2015. General and administrative expenses declined to $27.4 million from $29.7 million last year, mostly due to disciplined expense management.
Balance Sheet and Capex
At the end of the second quarter, Ensco had $790.3 million in cash and cash equivalents. Long-term debt (including current maturities) was $4,905.6 million, with debt-to-capitalization ratio of 38.3% compared with 40.3% in the year-ago quarter.
Zacks Rank
Ensco currently carries a Zacks Rank #4 (Sell). Some better-ranked players from the energy sector are Sasol Ltd (SSL - Free Report) , Dril-Quip, Inc. (DRQ - Free Report) and Murphy USA Inc (MUSA - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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