Earnings Review and Free Research Report:Ensco Reported Better than Expected Results
Research Desk Line-up: Helmerich & Payne Post Earnings Coverage
LONDON, UK / ACCESSWIRE / November 21, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Ensco PLC (NYSE: ESV), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=ESV, following the Company's announcement of its third quarter fiscal 2017 operating results on October 25, 2017. The offshore contract drilling services Company's revenue and earnings declined on a y-o-y basis. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Get more of our free earnings reports coverage from other constituents of the Oil & Gas Drilling & Exploration industry. Pro-TD has currently selected Helmerich & Payne, Inc. (NYSE: HP) for due-diligence and potential coverage as the Company reported on November 16, 2017, its financial results for Q4 FY17. Register for a free membership today, and be among the early birds that get access to our report on Helmerich & Payne when we publish it.
At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on ESV; also brushing on HP. With the links below you can directly download the report of your stock of interest free of charge at:
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Earnings Reviewed
For the three months ended September 30, 2017, Ensco's revenues were $460 million, down 16% compared to $548 million in Q3 2016, primarily due to fewer rig operating days and a decline in the average day rate for the fleet to $166,000 from $184,000 in the year-ago same period. The Company's revenue numbers were ahead of analysts' expectations of $449.9 million.
For Q3 2017, Ensco's contract drilling expense declined to $286 million from $298 million in Q3 2016, attributed to disciplined cost management including more efficient stacking of rigs, savings from fleet rationalization and lower support costs. The Company's depreciation expense of $108 million in the reported quarter was consistent with the year-ago comparable period. Ensco's general and administrative (G&A) expense increased to $30 million in Q3 2017 from $25 million in Q3 2016 due to transaction costs related to the acquisition of Atwood.
Ensco reported a loss of $25.4 million, or $0.08 per diluted share, for Q3 2017 compared to earnings of $85.3 million, or $0.28 per share, in Q3 2016. The Company's reported quarter results included $6 million, or $0.02 per share of transaction costs, related to the acquisition of Atwood Oceanics and $3 million, or $0.01 per share, of discrete tax expense. On an adjusted basis, Ensco's adjusted loss from continuing operations was $0.05 per share in the reported quarter compared to earnings of $0.21 per share in the year-earlier same quarter. The Company's results were better than Wall Street's expectations for a loss of $0.12 per share.
Ensco's Segment Highlights
During Q3 2017, the Company's floater revenues were $292 million compared to $319 million in Q3 2016. The segment's revenues decreased primarily due to a decline in reported utilization to 46% from 48% in the year-ago corresponding period and a decline in the average day rate to $334,000 from $353,000 in Q3 2016. Adjusted for uncontracted rigs and planned downtime, operational utilization was 99.6% up from 98.9% in the prior year's same quarter. The segment's contract drilling expense declined to $139 million in Q3 2017 from $154 million in Q3 2016, primarily due to more efficient stacking of rigs and lower support costs.
For Q3 2017, the Jackup's revenues were $153 million compared to $214 million in Q3 2016, due to fewer rig operating days and a decline in the average day rate to $88,000 from $109,000 in Q3 2016. The segment's reported utilization increased to 60% from 55% in the prior year's same quarter due to the retirement of several jackups. Adjusted for uncontracted rigs and planned downtime, operational utilization was 99.3% up from 98.9% in Q3 2016. The segment's contract drilling expense of $133 million, consistent on a y-o-y basis, as higher contract preparation costs were offset by savings from fleet rationalization and lower support costs.
During Q3 2017 the managed drilling rigs' revenues of $15 million were equal to the prior-year's same period. The segment's contract drilling expense increased to $14 million in the reported quarter from $11 million in the year-ago comparable period primarily due to a higher allocation of support costs following a reduction in the size of the fleet.
Pro-forma Financial Position
After completing the acquisition of Atwood and extending Ensco's revolving credit facility, the Company's pro-forma financial position as of 30 September 2017 reflected the following:
- $3.2 billion of contracted revenue backlog excluding bonus opportunities and 2.9 billion of liquidity;
- Ensco had $0.9 billion of cash and short-term investments and $2.0 billion available in revolving credit facility;
- the Company did not have any debt maturities until Q2 2019 and less than $1.0 billion of debt maturing before 2024, $4.7 billion of long-term debt;
- Ensco's net debt-to-capital ratio of 30%.
Stock Performance
On Monday, November 20, 2017, the stock closed the trading session at $5.40, marginally down0.92% from its previous closing price of $5.45. A total volume of 11.57 million shares have exchanged hands. Ensco's stock price surged5.47% in the last one month and 23.85% in the past three months. The stock is trading has a dividend yield of 0.74%. The stock currently has a market cap of $2.33 billion.
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