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Rowan Companies (RDC) Posts Narrower-Than-Expected Q3 Loss

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Rowan Companies plc (RDC - Free Report) reported adjusted third-quarter 2018 loss from continuing operations of $1.13 per share, narrower than the Zacks Consensus Estimate loss of $1.15. However, the quarterly loss was wider than the year-ago quarter's loss of 16 cents.

Total revenues were $193 million in the third quarter, down from $292 million in the prior-year quarter. On the flip side, the top line beat the Zacks Consensus Estimate of $179 million.

The decline in total revenue-producing rig days, fall in average dayrates and lower average utilization were responsible for the decline.  
 

Rowan Companies PLC Price, Consensus and EPS Surprise

 

Rowan Companies PLC Price, Consensus and EPS Surprise | Rowan Companies PLC Quote

 

Dayrates and Utilization

The company's deepwater rigs recorded an average dayrate of $135,000, down from $476,600 in the year-ago quarter. Moreover, jackup rigs saw a dayrate of $115,900, down from $122,100 in the prior-year quarter.

The overall dayrate of all the rigs was $117,300 compared with $157,700 in third-quarter 2017. Also, average utilization of the company's rigs was 66% compared with 74% in the comparable quarter last year.

Total revenue-producing rig days declined 23.8% year over year to 1,395 in the third quarter.

Total Expenses

In the third quarter, the company reported $309.4 million in total costs, higher than $299.8 million in the year-ago quarter. The primary reason behind the increase in costs was 8.1% higher direct operating expenses (from $168.7 million to $182.3 million).

Financials

As of Sep 30, 2018, the company's cash balance was $1.0 billion and long-term debt was $2.3 billion. The long-term debt-to-capitalization ratio of the company was 31.2%.

Zacks Rank & Key Picks

Currently, Fort Worth, TX-based Rowan Companies has a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are Hess Corporation (HES - Free Report) , Enbridge Inc (ENB - Free Report) and Eni SpA (E - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

New York-based Hess is a global integrated energy company. It delivered an average positive earnings surprise of 230.5% in the last four quarters.

Headquartered in Calgary, Alberta, Enbridge is a leading energy infrastructure company. In the trailing four quarters, the company delivered an average positive earnings surprise of 33.2%.

Based in Rome, Italy, Eni is among the leading integrated energy players in the world. The partnership witnessed a negative earnings surprise of 0.3% in the preceding four quarters.

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