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Ensco's (ESV) Q1 Earnings & Sales Miss Estimates, Fall Y/Y
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Ensco plc recently reported first-quarter 2018 loss of 32 cents a share (excluding one-time items), which was wider than the Zacks Consensus Estimate of a loss of 25 cents. Moreover, the figure compared unfavorably with loss of 4 cents posted in the year-earlier quarter.
Total revenues were $417 million, down from $471 million reported in the year-ago quarter. The revenue figure also missed the Zacks Consensus Estimate of $433 million.
The weak first quarter results stemmed from fall in utilization, lower average day rates and increased operating expenses, partially offset by revenues from the Atwood rigs.
Floaters: Revenues in the segment totaled $259 million, down 9.1% from the year-ago quarter’s $285 million. This was caused by a decline in reported utilization from 47% in the prior-year period to 44% in the first quarter. Average day rates fell to $263,000 in the quarter from $337,000 in the year-ago period.
The negatives were partially offset by revenues of $21 million from the acquired Atwood rigs. Floater contract drilling expenses flared up nearly 26.7% to $185 million from $146 million witnessed in first-quarter 2017.
Operating loss in the segment was $1.4 million against the prior-year quarter’s operating income of $65.6 million. The downfall was primarily caused by 26% year-over-year increase in contract drilling expenses.
Jackups: Revenues at this segment declined 16.9% to $143 million from $172 million in the year-ago quarter. A fall in reported utilization, from 64% in the year-ago quarter to 61% in the January-March period, and a decline in the average day rate to $74,000 from $86,000, resulted in the decline. This was, however, partially offset by $5 million in revenues from the acquired Atwood rigs. Contract drilling expenses went up 6.7% year over year to $127 million in the first quarter, primarily due to the insertion of five legacy Atwood jackups.
Operating loss in the segment was $20 million against the prior-year quarter’s operating income of $21.1 million, due to 7% year-over-year rise in jackup rig’s contract drilling expenses.
Other: In the first quarter of 2018, revenues of $15 million were reported by the company, in line with the year-ago quarter. Contract drilling expenses of $13 million in the segment remained flat year over year. These traits led to operating income of $1.4 million, similar to the year-ago period.
Costs and Expenses
Depreciation expenses came in at $115.2 million compared with $109.2 million in first-quarter 2017. The uptick primarily resulted from the addition of Atwood rigs to the company’s fleet. General and administrative expenses increased to $27.9 million from $26 million in the year-ago quarter. Total operating expenses rose 13.3% year over year to $468.3 million.
Balance Sheet
At the end of the first quarter, Ensco had $465.4 million in cash and cash equivalents. Long-term debt was $4,987.3 million, with debt-to-capitalization ratio of 36.7% compared with 35.2% in the year-ago quarter.
Zacks Rank and Stocks to Consider
This London-based offshore drilling service provider 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. In 2018, the bottom line of the company is likely to be up 34.1%. Over the trailing four 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 earnings are expected to increase 337.2%.
Hong Kong-based CNOOC is an integrated energy company. Its revenues for the current year are estimated to jump 49% year over year, while the bottom line is projected to surge 82.8%.
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Ensco's (ESV) Q1 Earnings & Sales Miss Estimates, Fall Y/Y
Ensco plc recently reported first-quarter 2018 loss of 32 cents a share (excluding one-time items), which was wider than the Zacks Consensus Estimate of a loss of 25 cents. Moreover, the figure compared unfavorably with loss of 4 cents posted in the year-earlier quarter.
Total revenues were $417 million, down from $471 million reported in the year-ago quarter. The revenue figure also missed the Zacks Consensus Estimate of $433 million.
The weak first quarter results stemmed from fall in utilization, lower average day rates and increased operating expenses, partially offset by revenues from the Atwood rigs.
Ensco plc Price, Consensus and EPS Surprise
Ensco plc Price, Consensus and EPS Surprise | Ensco plc Quote
Segmental Performance
Floaters: Revenues in the segment totaled $259 million, down 9.1% from the year-ago quarter’s $285 million. This was caused by a decline in reported utilization from 47% in the prior-year period to 44% in the first quarter. Average day rates fell to $263,000 in the quarter from $337,000 in the year-ago period.
The negatives were partially offset by revenues of $21 million from the acquired Atwood rigs. Floater contract drilling expenses flared up nearly 26.7% to $185 million from $146 million witnessed in first-quarter 2017.
Operating loss in the segment was $1.4 million against the prior-year quarter’s operating income of $65.6 million. The downfall was primarily caused by 26% year-over-year increase in contract drilling expenses.
Jackups: Revenues at this segment declined 16.9% to $143 million from $172 million in the year-ago quarter. A fall in reported utilization, from 64% in the year-ago quarter to 61% in the January-March period, and a decline in the average day rate to $74,000 from $86,000, resulted in the decline. This was, however, partially offset by $5 million in revenues from the acquired Atwood rigs. Contract drilling expenses went up 6.7% year over year to $127 million in the first quarter, primarily due to the insertion of five legacy Atwood jackups.
Operating loss in the segment was $20 million against the prior-year quarter’s operating income of $21.1 million, due to 7% year-over-year rise in jackup rig’s contract drilling expenses.
Other: In the first quarter of 2018, revenues of $15 million were reported by the company, in line with the year-ago quarter. Contract drilling expenses of $13 million in the segment remained flat year over year. These traits led to operating income of $1.4 million, similar to the year-ago period.
Costs and Expenses
Depreciation expenses came in at $115.2 million compared with $109.2 million in first-quarter 2017. The uptick primarily resulted from the addition of Atwood rigs to the company’s fleet. General and administrative expenses increased to $27.9 million from $26 million in the year-ago quarter. Total operating expenses rose 13.3% year over year to $468.3 million.
Balance Sheet
At the end of the first quarter, Ensco had $465.4 million in cash and cash equivalents. Long-term debt was $4,987.3 million, with debt-to-capitalization ratio of 36.7% compared with 35.2% in the year-ago quarter.
Zacks Rank and Stocks to Consider
This London-based offshore drilling service provider 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. In 2018, the bottom line of the company is likely to be up 34.1%. Over the trailing four 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 earnings are expected to increase 337.2%.
Hong Kong-based CNOOC is an integrated energy company. Its revenues for the current year are estimated to jump 49% year over year, while the bottom line is projected to surge 82.8%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>