Hercules Offshore, Inc. (HERO), a provider of shallow-water drilling and marine services, Tuesday said it expects an operating loss for the fourth quarter, partly due to the setting up of an allowance for doubtful accounts and a non-cash charge.
Hercules said it is establishing an allowance for doubtful accounts of nearly $29.8 million as of December 31, 2009, related to a single customer operating one rig in its International Offshore segment.
According to the drilling contractor, the rig remains under contract and the amount owed to the company is undisputed by the customer. However, this allowance is being established as among other factors, it was recently determined that the credit risk associated with this customer has deteriorated. ''As a result of this determination and until such time that the credit risk improves, future dayrate from this customer will no longer meet the revenue recognition criteria due to uncertainty surrounding collectability,'' Hercules said.
Additionally, the results for the quarter will include a non-cash charge of about $7.3 million to fully impair the related deferred mobilization and contract preparation costs. This charge is expected to be partially offset by a $2.6 million reduction in previously accrued contract related operating costs, which are not expected to be settled if the receivable is not collected.
Including the impact of these items, Hercules expects fourth-quarter revenue to be about $173 million-$178 million. Operating loss for the quarter is projected to be around $43 million-$48 million, including about $50 million of depreciation and amortization expense.
On average, 17 analysts polled by Thomson Reuters expect the company to lose $0.27 per share in the fourth quarter. Wall Street looks for revenues in the range of $159.43 million-184.82 million.
Further, the company said it rescheduled its fourth-quarter earnings release date to March 2 from February 9.
HERO closed Tuesday's regular trade at $4.62, down $0.12 or 2.53%, on 1.35 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.