Tuesday, contract drilling services provider Rowan Companies Inc. (RDC) announced a decline in second quarter earnings from a year ago, reflecting lower rig utilization and lower revenues from manufacturing segment.
The Houston, Texas-based Rowan's second quarter net income declined to $96.6 million or $0.85 per share from $120.6 million or $1.06 per share in the prior year quarter. On average, twenty-seven analysts polled by Thomson Reuters expected the company to earn $0.75 per share for the quarter. Analysts' estimates typically exclude special items.
Rowan said latest quarter results included an $8 million or $0.07 per share tax benefit related to a recent tax court ruling which provides that certain foreign-source income is not taxable in the US. The year-ago period result included gains on asset disposals of $1.5 million or $0.01 per share.
Revenues dipped to $482.2 million for the quarter from $587.1 million in the previous year quarter, yet came in ahead of Street estimate of $434.95 million.
Rowan's drilling operations generated revenues of $320.8 million in the quarter, down by 13% from the prior-year quarter and by 16% from the first quarter of 2009 due primarily to lower rig utilization. The company's income from drilling operations was $127.9 million, down by 19% from the prior-year quarter and by 32% from the first quarter of 2009.
Rowan's manufacturing operations generated external revenues of $161.4 million in the quarter, down 27% from the prior-year period, but up by 41% over the first quarter of 2009.
For the first half, Rowan posted net income of $228.3 million or $2.01 per share, up from $219.2 million or $1.94 per share in the comparable period a year ago.
Rowan generated revenues of $977 million in the first six months, compared to $1.073 billion in the corresponding period last year.
Matt Ralls, president and chief executive officer, said, "Looking forward, we expect that excess rig capacity will continue to put downward pressure on day rates. Though we are seeing signs of a pick-up in drilling demand in certain areas, there are still more available rigs than drilling tenders."
Ralls added that the company remained very confident in the long-term prospects for offshore drilling in general and for jack-ups in particular.
RDC is trading at $21.48, down $0.87 or 3.88%, on on NYSE.
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