Oilfield services company Superior Energy Services Inc. (SPN) on Wednesday reported a loss for the fourth quarter, hurt by asset impairment and acquisition charges as well as a 46% decline in revenues. Excluding items, adjusted earnings per share for the quarter declined 81% from the same period last year.
The New Orleans, Louisiana-based company posted a net loss for the fourth quarter of $114.63 million or $1.46 per share, compared to net income of $83.29 million or $1.06 per share in the year-ago quarter. The company had earlier forecast GAAP loss per share for the quarter in a range of approximately $1.40-$1.50.
The results for the latest quarter include a non-cash charge of $0.98 per share after tax, related to the impairment of domestic land well enhancement assets, charges of $0.13 per share in the aggregate for transaction-related expenses for the acquisition of Hallin Marine Subsea International plc (HLNMF.PK), a write down of components from one of the company's 265-ft. class liftboats and a reduction of the net realizable value of accounts receivable due to continuing economic uncertainties.
The company had also increased the estimated total cost to complete the wreck removal project, which negatively impacted earnings by $0.56 per share after tax.
Excluding items, adjusted net income for the fourth quarter fell to $16.47 million or $0.21 per share from $88.46 million or $1.13 per share last year. The company had earlier projected adjusted earnings per share for the quarter in a range of $0.19-$0.23. On average, twelve analysts polled by Thomson Reuters expected the company to report earnings of $0.22 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter declined 46.2% to $264.58 million from $491.80 million in the year-ago period, and missed analysts' consensus revenue estimate of $365.43 million.
Cost of oilfield services and rentals for the quarter were $188.63 million, down from $235.47 million a year ago. The company recorded a gain on sales of businesses of $2.08 million in teh quarter.
Loss from operations for the latest quarter was $165.76 million compared to income from operations of $131.33 million in the prior-year period.
Segment-wise, the company's subsea and well enhancement segment, previously known as the well intervention segment, reported a decline in revenues to $145.82 million from $304.42 million a year ago. Excluding the $68.7 million impact from cost adjustments to the wreck removal project, segment revenue was $214.5 million. Loss from operations was $176.59 million, compared to income from operations of $67.47 million in the previous-year quarter.
Revenue for the drilling products and services segment, known earlier as the rental tools segment, declined to $97.57 million from $149.24 million in the previous-year quarter. Income from operations was $13.77 million, or 14% of segment revenue, down from $50.71 million, or 34% of segment revenue in the same period last year.
Marine segment revenues for the quarter were $21.19 million, down from $38.14 million in the same period last year. Loss from operations was $2.95 million, compared with income from operations of $13.15 million a year ago. Average fleet utilization in the quarter was 45%, compared with 76% in the year-ago period. The company sold four of its 145-feet class liftboats during the quarter.
For fiscal year 2009, Superior Energy reported a net loss of $102.32 million or $1.31 per share, compared to net income of $351.48 million or $4.33 per share last year.
Adjusted net income for the year fell to $112.90 million or $1.44 per share from $325.01 million or $4.00 per share a year ago. Analysts expected the company to report earnings of $1.65 per share for the year.
Revenues for the year were $1.45 billion, down 22.8% from $1.88 billion in the prior year. Wall Street analysts had a consensus revenue estimate for the year of $1.55 billion.
Terence Hall, Chairman and CEO of Superior, said, "During 2009, we generated positive core earnings in a very challenging market environment, had operating cash flow of $276 million, expanded into new international markets and further positioned the Company to participate in subsea markets worldwide. Looking ahead, we're excited about the additional opportunities we'll have as a result of the Hallin Marine and Bullwinkle Field acquisitions. We expect to build momentum throughout the year as seasonal factors in the Gulf of Mexico improve and activity increases."
In early February, Superior Energy said it closed its previously announced acquisition of Hallin Marine Subsea International on January 26. The company paid about $162 million to purchase all of the equity in Hallin, in addition to extinguishing Hallin's debt of approximately $55 million.
At that time, the company also forecast fiscal year 2010 earnings in a range of $1.50- $1.70 per share. Analysts expect the company to report earnings of $1.59 per share for the year.
The company said that due to the seasonal nature of the Gulf of Mexico and as many of its well intervention services lag a recovery in the rig count, it anticipates full-year earnings to be weighted more toward the second half of the year.
SPN closed Wednesday's regular trading session at $20.81, up $0.21 or 1.02% on a volume of 1.40 million shares.
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