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Rowan (RDC) Posts Stellar Q1 Earnings Despite Market Woes

Rowan Companies plc's RDC adjusted first-quarter 2016 earnings from continuing operations came in at 98 cents per share. The bottom line comfortably beat the Zacks Consensus Estimate of 75 cents. Strong utilization, cost-control measures and outstanding uptime performance led to the stellar performance. However, results decreased from the adjusted year-ago profit level of 99 cents.
 

 

Total revenues were $500.2 million in the first quarter of 2016, down from $547.0 million in the prior-year quarter due primarily to lower utilization of jack-up rigs. This was partially offset by contributions from the third and fourth newbuild ultra-deepwater drillships, which began operating in February and Jun 2015, respectively. The top line surpassed the Zacks Consensus Estimate of $494 million.

Dayrates and Utilization

The company's Gulf of Mexico rigs had a dayrate of $73,200 (against $115,400 in the year-ago quarter), Middle East rigs saw a dayrate of $130,700 (compared with $138,500) and North Sea rigs' dayrate was $287,100 (against $295,800).

The overall dayrate of all jackup rigs was $182,300 compared with $180,200 in first-quarter 2015. Average utilization (excluding cold-stacked rigs) of the company's rigs was 73% against 90% in the comparable quarter last year.

Financials

As of Mar 31, 2016, the company's cash balance was $595.2 million and long-term debt (including current maturities) was $2,655.0 million. The long term debt-to-capitalization ratio was 35.1%.

Zacks Rank and Key Stock Picks

Rowan Companies currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are ReneSola Ltd. SOL, Seadrill Partners LLC SDLP and Braskem S.A. BAK. Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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BRASKEM SA (BAK): Free Stock Analysis Report
 
ROWAN COS PLC (RDC): Free Stock Analysis Report
 
RENESOLA LT-ADR (SOL): Free Stock Analysis Report
 
SEADRILL PTNRS (SDLP): Free Stock Analysis Report
 
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