Helmerich & Payne Inc. (HP - Free Report) recently reported second-quarter fiscal 2018 adjusted operating loss of 5 cents per share, in line with the Zacks Consensus Estimate. However, the bottom line compared favorably with the year-ago adjusted loss of 47 cents. The outperformance was primarily driven by higher drilling activity at its biggest segment — U.S. Land.
Revenues of $577.5 million topped the Zacks Consensus Estimate of $562 million. Further, the top line witnessed an increase of more than 42.5% from the year-ago figure of $405.3 million.
Segment Performance
U.S. Land: During the quarter, operating revenues totaled $482.7 million (83.6% of total revenues), up 45.9% year over year. While average rig revenue per operating day was $22,928, — 1.2% above the year-ago period — average rig margin per day was up 25.6% to $8,842. Moreover, utilization levels of 59% in the quarter under review (versus 42% in second-quarter fiscal 2017) resulted in an operating income of 27.1 million at the segment, marking a turnaround from the year-ago loss of $51.9 million.
Offshore: Helmerich & Payne’s Offshore revenues came in at around $33 million, compared with $36.2 million in the prior-year quarter. Daily average rig revenues fell 6.7% to $33,583 and average rig margin per day fell 12.1% to $9,504. Owing to this, the segment’s operating income decreased 7.8% to $5.5 million. Moreover, rig utilization was down from the year-ago level of 77% to 63%.
International Land: Helmerich & Payne’s International Land operations generated revenues of $52.5 million, up from $34.8 million in the prior-year quarter. Average daily rig revenues were $32,796, down 12.2% from the corresponding period of last year and rig margin per day was $8,533, up from the year-ago figure of $3,691.
Additionally, average rig expense per day decreased 27.9% year over year, while activity levels increased to 45% from 25% a year ago. As a result, the segment’s operating loss narrowed to $695 thousand from the year-ago loss of around $11 million.
Capital Expenditure & Balance Sheet
During the quarter, Helmerich & Payne spent approximately $99.5 million on capital programs. As of Mar 31, 2018, the company had approximately $334.8 million in cash, while long-term debt stood at $493.4 million (debt-to-capitalization ratio of 9.9%).
Guidance
The Tulsa, OK-based company expects activity in the U.S. land segment to rise 7% sequentially during the third quarter of fiscal 2018. While average rig revenue per day is likely to be around $23,000, daily average rig cost is expected to be roughly $14,400 during the quarter.
As of the offshore segment, Helmerich & Payne expects average rig margin per day to be around $10,500 during third-quarter fiscal 2018 and revenue days to increase 15% sequentially.
The international land segment will likely witness a 5-10% sequential increase in revenue days during the quarter, while average rig margin per day is expected to be around $9,000.
For fiscal 2018, Helmerich & Payne projects a capital budget in the range of $400-$450 million.
Zacks Rank and Stocks to Consider
Helmerich & Payne currently carries a Zacks Rank #3 (Hold).
If you are interested in the energy sector, you can opt for some better-ranked stocks like EOG Resources, Inc. (EOG - Free Report) , Oasis Midstream Partners LP and CNOOC Ltd. (CEO - Free Report) . While EOG Resources sports a Zacks Rank #1 (Strong Buy), Oasis Midstream and CNOOC have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Houston, TX-based EOG Resources is an upstream energy company. For 2018, the bottom line of the company is likely to be up 34.1%. In the last four reported quarters, the company witnessed a positive average surprise of 25.7%.
Houston, TX-based Oasis Midstream is an integrated energy partnership. Its revenues for 2018 are anticipated to improve 29.3% from the prior-year quarter, while its bottom line is expected to increase 337.2%.
Hong Kong-based CNOOC is an integrated energy company. Its revenues for 2018 are anticipated to improve 49% year over year, while its bottom line is expected to increase 82.8%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
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 >>
Helmerich & Payne Inc. (HP - Free Report) recently reported second-quarter fiscal 2018 adjusted operating loss of 5 cents per share, in line with the Zacks Consensus Estimate. However, the bottom line compared favorably with the year-ago adjusted loss of 47 cents. The outperformance was primarily driven by higher drilling activity at its biggest segment — U.S. Land.
Revenues of $577.5 million topped the Zacks Consensus Estimate of $562 million. Further, the top line witnessed an increase of more than 42.5% from the year-ago figure of $405.3 million.
Segment Performance
U.S. Land: During the quarter, operating revenues totaled $482.7 million (83.6% of total revenues), up 45.9% year over year. While average rig revenue per operating day was $22,928, — 1.2% above the year-ago period — average rig margin per day was up 25.6% to $8,842. Moreover, utilization levels of 59% in the quarter under review (versus 42% in second-quarter fiscal 2017) resulted in an operating income of 27.1 million at the segment, marking a turnaround from the year-ago loss of $51.9 million.
Offshore: Helmerich & Payne’s Offshore revenues came in at around $33 million, compared with $36.2 million in the prior-year quarter. Daily average rig revenues fell 6.7% to $33,583 and average rig margin per day fell 12.1% to $9,504. Owing to this, the segment’s operating income decreased 7.8% to $5.5 million. Moreover, rig utilization was down from the year-ago level of 77% to 63%.
International Land: Helmerich & Payne’s International Land operations generated revenues of $52.5 million, up from $34.8 million in the prior-year quarter. Average daily rig revenues were $32,796, down 12.2% from the corresponding period of last year and rig margin per day was $8,533, up from the year-ago figure of $3,691.
Additionally, average rig expense per day decreased 27.9% year over year, while activity levels increased to 45% from 25% a year ago. As a result, the segment’s operating loss narrowed to $695 thousand from the year-ago loss of around $11 million.
Capital Expenditure & Balance Sheet
During the quarter, Helmerich & Payne spent approximately $99.5 million on capital programs. As of Mar 31, 2018, the company had approximately $334.8 million in cash, while long-term debt stood at $493.4 million (debt-to-capitalization ratio of 9.9%).
Guidance
The Tulsa, OK-based company expects activity in the U.S. land segment to rise 7% sequentially during the third quarter of fiscal 2018. While average rig revenue per day is likely to be around $23,000, daily average rig cost is expected to be roughly $14,400 during the quarter.
As of the offshore segment, Helmerich & Payne expects average rig margin per day to be around $10,500 during third-quarter fiscal 2018 and revenue days to increase 15% sequentially.
The international land segment will likely witness a 5-10% sequential increase in revenue days during the quarter, while average rig margin per day is expected to be around $9,000.
For fiscal 2018, Helmerich & Payne projects a capital budget in the range of $400-$450 million.
Zacks Rank and Stocks to Consider
Helmerich & Payne currently carries a Zacks Rank #3 (Hold).
If you are interested in the energy sector, you can opt for some better-ranked stocks like EOG Resources, Inc. (EOG - Free Report) , Oasis Midstream Partners LP and CNOOC Ltd. (CEO - Free Report) . While EOG Resources sports a Zacks Rank #1 (Strong Buy), Oasis Midstream and CNOOC have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Houston, TX-based EOG Resources is an upstream energy company. For 2018, the bottom line of the company is likely to be up 34.1%. In the last four reported quarters, the company witnessed a positive average surprise of 25.7%.
Houston, TX-based Oasis Midstream is an integrated energy partnership. Its revenues for 2018 are anticipated to improve 29.3% from the prior-year quarter, while its bottom line is expected to increase 337.2%.
Hong Kong-based CNOOC is an integrated energy company. Its revenues for 2018 are anticipated to improve 49% year over year, while its bottom line is expected to increase 82.8%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
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 >>
Get the latest research report on CEO - FREE
Get the latest research report on HP - FREE
Get the latest research report on EOG - FREE