Newspaper article THE JOURNAL RECORD

Tulsa-Based H&P 2Q Profits More Than Double

Newspaper article THE JOURNAL RECORD

Tulsa-Based H&P 2Q Profits More Than Double

Article excerpt

Second-quarter profits more than doubled for Helmerich & Payne Inc. as the drilling contractor reported stronger revenue in U.S. land-drilling activity.

Tulsa-based H&P reported that net income rose 111 percent to $98.8 million, or 91 cents per share, compared to $46.75 million or 43 cents per share last year.

Earnings per share from continuing operations rose 33 percent to 91 cents, up from 68 cents a year ago.

Operating revenues grew to 38 percent to about $604.41 million from last year's $436.58 million.

However, the drilling contractor fell short of analysts' expectations.

Analysts polled by Thomson Reuters most recently forecast earnings of 97 cents per share on revenue of $592.4 million.

Tulsa securities analyst Jake Dollarhide said the report was impressive, but it disappointed the Wall Street analysts.

As a result of falling short of analysts' expectations, shares of Helmerich & Payne Inc. fell $4.93, or 7.04 percent, to $65.05 in trading Thursday.

"The stock is getting hammered today because H&P came in under their expectations," said Dollarhide, CEO and owner of Longbow Asset Management. "This ought to be a one-day fluke."

What is more exciting for H&P is the U.S. drilling market, Dollarhide said.

H&P announced that it signed contracts to build and operate eight additional FlexRigs, bringing to 14 the number of additional FlexRig commitments announced since the company's Jan. 27 earnings release.

The rigs will be built and operated in the U.S. under multi-year term contracts that provide attractive day rates and economic returns, Dollarhide said.

"These unconventional drilling plays are driving these orders," Dollarhide said. "It shows that H&P is by far the No.1 maker of highly mobile rig providers in the nation."

Greg Womack, president of Edmond-based Womack Investment Advisers Inc., said drilling and service providers are in a sweet spot with the surge in activity over the last year or so. …

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