Helmerich & Payne delivers better-than-expected Q1 results

Helmerich & Payne Inc. (HP) reported revenues and earnings that surpassed market expectations in the first quarter of 2019. The stock was down 1.4% in morning hours on Wednesday.

Total operating revenues grew 31% to $740.5 million from the same period last year, helped by a growth in contract drilling revenues.

Net income was $19 million, or $0.17 per share, compared to $500 million, or $4.55 per share, in the prior-year period. Last year’s results were boosted by a one-time tax benefit. Adjusted EPS totaled $0.32.

The company posted revenue increases across all its operating segments during the quarter compared to last year. The US Land Operations segment saw an increase in average rig revenue per day while International Land Operations posted a decline versus last year. Average rig revenue per day in Offshore Operations remained relatively flat.

Also see: Helmerich & Payne Q4 2018 Earnings Conference Call Transcript

For the second quarter of 2019, in the US Land Operations segment, quarterly revenue days are expected to decrease by approx. 3-5% on a sequential basis. Average rig revenue per day is expected to be $25,500-26,000.

In Offshore Operations, quarterly revenue days are expected to increase by around 3% sequentially while average rig margin per day is expected to be approx. $6,000-7,000. Management contracts are expected to generate around $4-5 million in operating income.

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In International Land Operations, quarterly revenue days are expected to drop around 10% sequentially, mainly due to lower activity in Colombia and less number of calendar days in the second quarter. Average rig margin per day is expected to be around $10,500-11,500.

For full-year 2019, Helmerich & Payne expects to incur capital expenditures of around $500 million to $530 million with around 35% expected for super-spec upgrades, 33-38% expected for maintenance and 27-32% expected for continued reactivations and other bulk purchases.

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