Superior Energy Services Inc. (SPN: Quote), a provider of specialized oilfield services and equipment, Monday reported a significant increase in profit for the second quarter, supported by the acquisition of Complete Production Services. However, the company cut its earnings forecast for the year, citing lower natural gas as well as realized crude oil prices and significant reductions in NGL prices.
Commenting on the results, David Dunlap, CEO of Superior, said, "The solid operating results, which include the first full quarter contribution from the products and services of legacy Complete Production Services, reflect the strength of our diversified business model in the face of weaker activity levels in U.S. dry gas basins and a flattening U.S. land rig count environment.''
It was in last November that Superior and Complete Production Services, Inc. announced a definitive merger agreement, combining the companies into a premier diversified mid-cap oilfield services company.
Houston, Texas-based Superior said its net income climbed to $141.85 million or $0.89 per share from $48.11 million or $0.59 per share in the prior-year period.
Net income from continuing operations improved to $0.90 per share from $0.51 per share.
The latest results included a $17.88 million pre-tax gain on sale of an equity-method investment. Adjusted earnings from continuing operations advanced to $0.83 per share from $0.49 per share.
On average, 15 analysts polled by Thomson Reuters expected earnings of $0.82 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the quarter surged to $1.243 billion from $479.9 million in the year-ago quarter. Analysts expected revenues of $1.28 billion.
In the just concluded quarter, U.S. land revenue totaled around $883.0 million, Gulf of Mexico revenue was about $170.8 million and international revenue came to $189.5 million.
Further, the company lowered its outlook for adjusted earnings from continuing operations in 2012 to a range of $2.75 to $3.05 per share from $3.30 - $3.60 per share. Analysts expect the company to report earnings of $3.08 per share for fiscal 2012.
Dunlap added, "Although we remain confident in the long-term outlook for the oil and resource driven prospects in the U.S. land market, continued low natural gas prices, a lower realized crude oil price and significant reductions in NGL prices are impacting our customers' cash flows, leading to reduced spending in the second half of 2012.''
Superior does not believe that this reduction will drive a precipitous drop in activity. However, the company expects lower utilization in its services businesses and pricing pressure in many of the oil and liquids basins as competitors relocate capacity to these markets from the dry gas basins.
SPN closed the regular trade at $23.31, down $0.01 or 0.04 percent, on 1.84 million shares. The stock fell over 9 percent in the extended trade.
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by RTT Staff Writer
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