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Ensco (ESV) Earnings Disappoint in Q1, Revenues In Line

Oil and natural gas driller Ensco plc ESV reported diluted first-quarter 2016 earnings (excluding one-time items) of 74 cents a share, which missed the Zacks Consensus Estimate of 80 cents. The figure, also, decreased from $1.49 a share earned in the year-earlier quarter.
 

Total revenue declined to $814.0 million from $1,163.9 million in the year-ago quarter. The top line, however, came in line with the Zacks Consensus Estimate.   

Segmental Performance

Floaters: Revenues were $513 million compared with $695 million last year. This was primarily because several floaters in the U.S. Gulf of Mexico completed contracts with above-average day rates. The completion of these contracts resulted in a decline in the average day rate to $365,000 from $425,000 a year ago.

Reported utilization was 64% compared with 86% last year. Adjusted for uncontracted rigs and planned downtime, operational utilization was 99% compared with 93% a year ago.

Jackups: Revenues were $278 million compared with $428 million a year ago. This was mostly due to a decline in average day rates to $118,000 from $144,000 in the prior-year quarter and fewer operating days for several jackups. However, this was partially offset by the addition of newbuild jackup ENSCO 110 to the active fleet.

Reported utilization was 66% compared with 87% in first-quarter 2015. Adjusted for uncontracted rigs and planned downtime, operational utilization in the reported quarter was 99.8% compared with 99.6% a year ago.

Other: Revenues plummeted to $24 million from $41 million in first-quarter 2015. Contract drilling expenses, however, decreased to $18 million from $33 million a year ago.

Costs and Expenses

Depreciation expense declined to $113 million from $137 million in first-quarter 2015. This was due to non-cash asset impairments. However, this was partially offset by the addition of several rigs to the operating fleet. General and administrative expense declined to $23 million from $30 million last year, mostly due to lower compensation costs.

Balance Sheet and Capex

At the end of the first quarter, Ensco had $1,084.0 million in cash and cash equivalents. Long-term debt (including current maturities) was $4,991.0 million, with net debt-to-capitalization ratio coming in at 33%.

Zacks Rank

Currently, Ensco Energy carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are SunCoke Energy Inc. SXC, PetroChina Co. Ltd. PTR and Braskem S.A. BAK. Each of these stocks holds a Zacks Rank #1 (Strong Buy).

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PETROCHINA ADR (PTR): Free Stock Analysis Report
 
BRASKEM SA (BAK): Free Stock Analysis Report
 
ENSCO PLC (ESV): Free Stock Analysis Report
 
SUNCOKE ENERGY (SXC): Free Stock Analysis Report
 
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