We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Helmerich & Payne (HP) Down 4.2% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Helmerich & Payne (HP - Free Report) . Shares have lost about 4.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Helmerich & Payne due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Helmerich & Payne Q4 Earnings Miss Estimates
Helmerich & Payne reported fourth-quarter fiscal 2023 adjusted earnings of 69 cents per share, which missed the Zacks Consensus Estimate of 72 cents. This underperformance can be attributed to the poor performance of the company's Offshore Gulf of Mexico and International Solutions units. In the year-ago period, the company had reported a profit of 45 cents per share.
Meanwhile, operating revenues of $660 million were in line with the Zacks Consensus Estimate. The figure increased 4.6% from the year-ago level on the back of strong results from the North America Solutions segment. Precisely, sales from the unit totaled $575.2 million, well ahead of the consensus mark of $565 million.
HP’s board of directors declared a quarterly cash dividend of 25 cents per share on Sep 6, 2023, and a supplemental cash dividend of 17 cents per share on Oct 17, 2023. Both the dividends are payable on Dec 4, 2023, to stockholders of record as of Nov 20, 2023.
Segmental Performance
North America Solutions: Operating revenues of $575.2 million were up 4.1% year over year on higher activity levels, with the average number of active rigs at 149. The top line beat our projection of $572.8 million.
Operating profit totaled $128.5 million compared with $92.1 million in the corresponding period of 2022. The figure missed our estimate of $133.5 million. The decline in drilling activity levels during the quarter can be attributed to this underperformance.
Offshore Gulf of Mexico: Revenues of $28.8 million decreased 16% from the year-ago quarter’s level of $34.3 million. The figure also missed our projection of $32 million.
Operating profit totaled $4.7 million, down 28.8% from that recorded in the prior-year period. The figure also missed our estimate of $5.8 million.
International Solutions: Sales in this segment increased to $53.2 million from $42.4 million in the comparable period of 2022. The figure beat our projection of $50.3 million.
The unit incurred a loss of $5 million, wider than the reported loss of $789,000 in the prior-year period. The figure is also wider than our projection of a loss of $7,00,000.
Financial Position
In the reported quarter, HP spent $395.5 million on capital programs. As of Sep 30, 2023, the company had $257.2 million in cash and cash equivalents, while the long-term debt totaled $545.1 million (debt-to-capitalization of 16.4%).
Guidance
For the first quarter of fiscal 2024, Helmerich & Payne anticipates operating gross margin in the North America Solutions and Offshore Gulf of Mexico segments to be in the range of $235-$255 million and $3-$7 million, respectively. The company expects to exit the quarter with around 150-156 contracted rigs.
Operating gross margin in the International Solutions segment is forecasted at a loss of $7-$10 million for the next fiscal quarter.
Helmerich & Payne estimates capital outlay between $450 million and $500 million for 2023. The company projects depreciation and amortization expenses at $390 million, and research and development expenses at $30 million. General and administrative expenses are anticipated to be $230 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Helmerich & Payne has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Helmerich & Payne has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Helmerich & Payne (HP) Down 4.2% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Helmerich & Payne (HP - Free Report) . Shares have lost about 4.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Helmerich & Payne due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Helmerich & Payne Q4 Earnings Miss Estimates
Helmerich & Payne reported fourth-quarter fiscal 2023 adjusted earnings of 69 cents per share, which missed the Zacks Consensus Estimate of 72 cents. This underperformance can be attributed to the poor performance of the company's Offshore Gulf of Mexico and International Solutions units. In the year-ago period, the company had reported a profit of 45 cents per share.
Meanwhile, operating revenues of $660 million were in line with the Zacks Consensus Estimate. The figure increased 4.6% from the year-ago level on the back of strong results from the North America Solutions segment. Precisely, sales from the unit totaled $575.2 million, well ahead of the consensus mark of $565 million.
HP’s board of directors declared a quarterly cash dividend of 25 cents per share on Sep 6, 2023, and a supplemental cash dividend of 17 cents per share on Oct 17, 2023. Both the dividends are payable on Dec 4, 2023, to stockholders of record as of Nov 20, 2023.
Segmental Performance
North America Solutions: Operating revenues of $575.2 million were up 4.1% year over year on higher activity levels, with the average number of active rigs at 149. The top line beat our projection of $572.8 million.
Operating profit totaled $128.5 million compared with $92.1 million in the corresponding period of 2022. The figure missed our estimate of $133.5 million. The decline in drilling activity levels during the quarter can be attributed to this underperformance.
Offshore Gulf of Mexico: Revenues of $28.8 million decreased 16% from the year-ago quarter’s level of $34.3 million. The figure also missed our projection of $32 million.
Operating profit totaled $4.7 million, down 28.8% from that recorded in the prior-year period. The figure also missed our estimate of $5.8 million.
International Solutions: Sales in this segment increased to $53.2 million from $42.4 million in the comparable period of 2022. The figure beat our projection of $50.3 million.
The unit incurred a loss of $5 million, wider than the reported loss of $789,000 in the prior-year period. The figure is also wider than our projection of a loss of $7,00,000.
Financial Position
In the reported quarter, HP spent $395.5 million on capital programs. As of Sep 30, 2023, the company had $257.2 million in cash and cash equivalents, while the long-term debt totaled $545.1 million (debt-to-capitalization of 16.4%).
Guidance
For the first quarter of fiscal 2024, Helmerich & Payne anticipates operating gross margin in the North America Solutions and Offshore Gulf of Mexico segments to be in the range of $235-$255 million and $3-$7 million, respectively. The company expects to exit the quarter with around 150-156 contracted rigs.
Operating gross margin in the International Solutions segment is forecasted at a loss of $7-$10 million for the next fiscal quarter.
Helmerich & Payne estimates capital outlay between $450 million and $500 million for 2023. The company projects depreciation and amortization expenses at $390 million, and research and development expenses at $30 million. General and administrative expenses are anticipated to be $230 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Helmerich & Payne has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Helmerich & Payne has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.