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Helmerich & Payne (HP) Q3 Earnings and Sales Top Estimates

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Helmerich & Payne Inc. (HP - Free Report) reported a fiscal third-quarter 2022 adjusted profit of 27 cents per share, beating the Zacks Consensus Estimate of 5 cents. In the year-ago period, the company incurred a loss of 57 cents per share. The outperformance reflects a significant uptick in drilling activity.

Meanwhile, operating revenues of $550.2 million topped the Zacks Consensus Estimate of $513 million and increased 65.6% from the year-ago level on the strong results of the key North America Solutions segment. Sales from the unit totaled $486 million, ahead of the consensus mark of $446 million.

Segment Performance

North America Solutions: In the quarter, operating revenues of $486 million were up 72.9% year over year on higher activity levels, with the average number of active rigs rising from 119 to 174. The increase in drilling activity due to rising oil and gas prices meant that the segment posted an operating profit of $57.3 million compared to the $43.7 million loss in the corresponding quarter last year.

Offshore Gulf of Mexico: Revenues of $32.7 million decreased by a mere 1.98% from the year-ago quarter’s figure of $33.4 million. However, the operating expenses during the reported quarter fell marginally year over year, resulting in the segment’s operating profit rising 2.9% from the prior-year period to $5.9 million.

International Solutions: The segment’s operations generated revenues of $29.1 million, up from $15.3 million in the corresponding period of 2021, due to improved activity levels, with the average number of active rigs rising from five to eight. However, the unit reported a loss of $6.5 million due to higher expenses, narrower than the loss of $3.5 million incurred in the corresponding period a year ago.

Helmerich & Payne, Inc. Price, Consensus and EPS Surprise

Helmerich & Payne, Inc. Price, Consensus and EPS Surprise

Helmerich & Payne, Inc. price-consensus-eps-surprise-chart | Helmerich & Payne, Inc. Quote

Financial Position

In the reported quarter, HP spent $70.5 million on capital programs. As of Jun 30, 2022, the company had $188.7 million in cash and cash equivalents, while the long-term debt was $542.3 million (debt-to-capitalization of 16.6%).

Guidance

This Tulsa, OK-based company anticipates the operating gross margins of the North America Solutions segment between $185 million and $205 million in the fiscal fourth quarter. It expects to exit the quarter with around 176 contracted rigs.

Coming to the Offshore Gulf of Mexico segment, Helmerich & Payne envisions operating gross margins within $9 and $11 million for the fiscal fourth quarter.

Additionally, International Solutions’ operating gross margins are forecast between $4 and $7 million for the next fiscal quarter.

For the current fiscal year, Helmerich & Payne maintained its capital outlay estimates within $250 and $270 million. The company also maintained depreciation and amortization expenses of about $405 million and research and development expenses for fiscal 2022 of roughly $27 million.

Moreover, SG&A expenses for fiscal 2022 are still anticipated to be more than $180 million.

Zacks Rank & Stock Picks

Helmerich & Payne currently carries a Zacks Rank #3 (Hold).

Investors interested in the energy space can look at some better-ranked stocks like TotalEnergies (TTE - Free Report) , Earthstone Energy (ESTE - Free Report) and Ranger Oil (ROCC - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for TotalEnergies’ 2022 earnings is pegged at $13.38 per share, which is about 100.3% higher than the year-ago earnings of $6.68 per share.

TTE beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being approximately 17%.

The Zacks Consensus Estimate for Earthstone’s 2022 earnings has been revised upward by about 17.4% over the past 90 days from $4.08 to $4.79 per share.

The Zacks Consensus Estimate for ESTE’s 2022 earnings stands at $4.79 per share, up about 283.2% from the year-ago earnings of $1.25.

The Zacks Consensus Estimate for Ranger Oil’s 2022 earnings is pegged at $13.09 per share, which is an increase of 138.9% from the year-ago earnings of $5.48.

ROCC beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 56.4%.

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