The stock of
Helmerich & Payne Inc. ( HP Quick Quote HP - Free Report) has gained 12.7% since its fiscal first-quarter earnings announcement on Jan 31. Besides scoring top and bottom-line beats, investors were encouraged by the oil and gas contract drilling services provider’s bullish outlook. What Did Helmerich & Payne’s Earnings Unveil?
Helmerich & Payne reported fiscal first-quarter 2022 adjusted loss of 45 cents per share, narrower than the Zacks Consensus Estimate of 50 cents. In the year-ago period, the company had incurred a loss of 82 cents per share. The outperformance reflects a significant uptick in activity.
Meanwhile, operating revenues of $409.8 million topped the Zacks Consensus Estimate of $377 million and increased 66.3% from the year-ago level on strong results from the key North America Solutions segment. Precisely, sales from the unit totaled $341 million, ahead of the consensus mark of $337 million. Highlighting the recovery from pandemic blues, Helmerich & Payne claims to have captured a roughly 35% market share for super spec rigs compared to less than 20% at the height of the pandemic. Financial Position
In the reported quarter, Helmerich & Payne spent $44 million on capital programs. As of Dec 31, 2021, the company had $234.2 million in cash and cash equivalents while long-term debt was $542.2 million (debt-to-capitalization of 16.3%). The company repurchased around $60.4 million in stock during the quarter and an additional $16.4 million so far in 2022.
With the rig market tightening, Helmerich & Payne sees certain leading-edge contracts getting revenue per day of around $30,000 compared to $23,000 in the reported quarter.
This Tulsa, OK-based company anticipates operating gross margins in the North America Solutions segment between $100 million and $115 million in the fiscal second quarter. It sees around 165-175 contracted rigs by Mar 31, 2022. Coming to the Offshore Gulf of Mexico segment, Helmerich & Payne envisions operating gross margins within $6-$8 million for the fiscal second quarter. Additionally, International Solutions operating gross margins are forecast between a loss of $2 million and breakeven for the current quarter. For the current fiscal year, Helmerich & Payne still estimates capital outlay within $250-$270 million, while it hopes to have between $400 million and $450 million of cash and short-term investments on hand by Sep 30, 2022. Zacks Rank & Stock Picks
Helmerich & Payne currently carries a Zacks Rank #3 (Hold).
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