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Helmerich & Payne (HP) Incurs Q2 Loss, Beats on Revenues
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Helmerich & Payne Inc. (HP - Free Report) recently released second-quarter fiscal 2020 results. The company posted adjusted quarterly loss of a cent per share. The Zacks Consensus Estimate was of earnings of 7 cents per share. Moreover, the bottom line came against the year-ago earnings of 66 cents. This underperformance can be attributed to weakness in the U.S. Land segment.
However, operating revenues of $633.64 million topped the Zacks Consensus Estimate of $593 million owing to strong contributions from International Land and H&P Technologies segments. However, the top line decreased 12.1% from the year-ago level of $721 million.
Segmental Performance
U.S. Land: During the quarter, operating revenues of $530.7 million were down 14.05% year over year as revenue days fell 18.8% to 17,273.
Rig utilization dropped 63% from the prior-year’s 67%. The segment’s operating loss came in at $309.1 million against the year-earlier profit of $102 million. Moreover, the average rig margin per day dipped 4.7% from the prior-year quarter to $10,759. However, rig revenue per day improved in the quarter under review.
Offshore: Revenues of $33 million were marginally down from the year-ago quarter’s $34.6 million as revenue days declined 15.4% to 457. Rig utilization plummeted 63% from the prior-year’s 75%. Moreover, higher average rig expenses per day and increased direct operating expenses resulted in the segment’s operating loss of $3.3 million against a profit of $4.5 million in the prior-year quarter.
Although daily average rig revenues surged 34.2% from the year-ago figure, rig expense per day climbed 85%. Moreover, the segment recorded a negative average rig margin per day in the quarter under review.
International Land: Operations generated revenues of $51.3 million, up from $50.8 million in the prior-year quarter on improved average rig revenue per day.
While rig utilization decreased to 53%, average rig revenue increased from the year-ago quarter to $31,706. The average rig margin per day decreased 9.08% from the year-ago quarter to $10,784. The segment’s bottom line induced an operating loss of $152.5 million versus a profit of $7.9 million a year ago.
H&P Technologies: In late 2018, Helmerich & Payne had announced the creation of its new segment H&P Technologies to highlight the addition of the then-acquired rig technology companies to its portfolio, namely MagVar and Motive Drilling along with Angus Jamieson Consulting, an industry leader in wellbore positioning.
During the reported quarter, the segment recognized revenues worth $17.7 million, up 20.2% from the year-ago figure. However, the company’s increasing asset impairment charge and depreciation, led to the segment’s wider operating loss of $33.6 million from the year-ago loss of $3.8 million.
Capital Expenditure & Balance Sheet
In the reported quarter, Helmerich & Payne spent $48.3 million on capital programs. As of Mar 31, 2020, the company had $336.08 million in cash and cash equivalents while long-term debt was $479.3 million (debt-to-capitalization of 12.2%).
Helmerich & Payne, Inc. Price, Consensus and EPS Surprise
This Tulsa, OK-based company anticipates operating gross margins in the U.S. land segment to be between $90 and $105 million inclusive of approximately $45 million of contract early termination compensation in the fiscal third quarter.
Coming to the offshore segment, Helmerich & Payne envisions operating gross margins within $4-6 million for the fiscal third quarter and operating income of $2 million.
Additionally, international land operating gross margins are forecast to be in a negative $4-$6 million range for the current quarter.
Revenues from HP Technologies are predicted in the $4-$7 million range.
For the current fiscal year, Helmerich & Payne estimates capital outlay within $185-$205 million.
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Helmerich & Payne (HP) Incurs Q2 Loss, Beats on Revenues
Helmerich & Payne Inc. (HP - Free Report) recently released second-quarter fiscal 2020 results. The company posted adjusted quarterly loss of a cent per share. The Zacks Consensus Estimate was of earnings of 7 cents per share. Moreover, the bottom line came against the year-ago earnings of 66 cents. This underperformance can be attributed to weakness in the U.S. Land segment.
However, operating revenues of $633.64 million topped the Zacks Consensus Estimate of $593 million owing to strong contributions from International Land and H&P Technologies segments. However, the top line decreased 12.1% from the year-ago level of $721 million.
Segmental Performance
U.S. Land: During the quarter, operating revenues of $530.7 million were down 14.05% year over year as revenue days fell 18.8% to 17,273.
Rig utilization dropped 63% from the prior-year’s 67%. The segment’s operating loss came in at $309.1 million against the year-earlier profit of $102 million. Moreover, the average rig margin per day dipped 4.7% from the prior-year quarter to $10,759. However, rig revenue per day improved in the quarter under review.
Offshore: Revenues of $33 million were marginally down from the year-ago quarter’s $34.6 million as revenue days declined 15.4% to 457. Rig utilization plummeted 63% from the prior-year’s 75%. Moreover, higher average rig expenses per day and increased direct operating expenses resulted in the segment’s operating loss of $3.3 million against a profit of $4.5 million in the prior-year quarter.
Although daily average rig revenues surged 34.2% from the year-ago figure, rig expense per day climbed 85%. Moreover, the segment recorded a negative average rig margin per day in the quarter under review.
International Land: Operations generated revenues of $51.3 million, up from $50.8 million in the prior-year quarter on improved average rig revenue per day.
While rig utilization decreased to 53%, average rig revenue increased from the year-ago quarter to $31,706. The average rig margin per day decreased 9.08% from the year-ago quarter to $10,784. The segment’s bottom line induced an operating loss of $152.5 million versus a profit of $7.9 million a year ago.
H&P Technologies: In late 2018, Helmerich & Payne had announced the creation of its new segment H&P Technologies to highlight the addition of the then-acquired rig technology companies to its portfolio, namely MagVar and Motive Drilling along with Angus Jamieson Consulting, an industry leader in wellbore positioning.
During the reported quarter, the segment recognized revenues worth $17.7 million, up 20.2% from the year-ago figure. However, the company’s increasing asset impairment charge and depreciation, led to the segment’s wider operating loss of $33.6 million from the year-ago loss of $3.8 million.
Capital Expenditure & Balance Sheet
In the reported quarter, Helmerich & Payne spent $48.3 million on capital programs. As of Mar 31, 2020, the company had $336.08 million in cash and cash equivalents while long-term debt was $479.3 million (debt-to-capitalization of 12.2%).
Helmerich & Payne, Inc. Price, Consensus and EPS Surprise
Helmerich & Payne, Inc. price-consensus-eps-surprise-chart | Helmerich & Payne, Inc. Quote
Guidance
This Tulsa, OK-based company anticipates operating gross margins in the U.S. land segment to be between $90 and $105 million inclusive of approximately $45 million of contract early termination compensation in the fiscal third quarter.
Coming to the offshore segment, Helmerich & Payne envisions operating gross margins within $4-6 million for the fiscal third quarter and operating income of $2 million.
Additionally, international land operating gross margins are forecast to be in a negative $4-$6 million range for the current quarter.
Revenues from HP Technologies are predicted in the $4-$7 million range.
For the current fiscal year, Helmerich & Payne estimates capital outlay within $185-$205 million.
Zacks Rank & Key Picks
Helmerich & Payne currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy space are Comstock Resources, Inc. (CRK - Free Report) , Murphy USA Inc. (MUSA - Free Report) and Pioneer Energy Services Corp. (PESXQ - 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.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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