Rig results: Ensco proft down but beats estimates.
Ensco profit drops
Offshore drilling contractor Ensco International reported today that its first-quarter net income declined year-over-year, as revenues were down from the prior year.
Ensco posted first-quarter net income attributable to shareholders was $220.7 million or $1.56 per share, compared to $272 million or $1.88 per share in the prior year.
Net income for the quarter was down at $222.1 million, compared to $273.7 million in the year-earlier quarter. In the prior year, income from continuing operations was $268.7 million or $1.85 per share, according to an RTT report.
On average, twenty-nine analysts polled by Thomson Reuters expected the company to earn $1.52 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues decreased to $514.1 million from $568.5 million for the previous-year quarter. Wall street analysts had a consensus revenue estimate of $512.78 million for the quarter.
For the recent quarter, average day rate for Ensco's 43-rig jack-up fleet increased 18% to $168,200 from $142,800 in the prior year quarter. The company said that although it realized higher average jack-up day rates in the first quarter, it sees the impact of lower oil and gas prices on utilization.
Utilisation of the company's jack-up fleet was 80%, compared to 95% in the first quarter of 2008, principally due to a reduction in activity in the Asia Pacific and North and South America regions.
Going ahead, the company reiterated that this year would be a "challenging year", as some of its jack-up rigs would be without contracts for some portion of the year.
Further, the company is aligning operations to current activity levels, and expects cost reduction initiatives to offset some of the negative financial impact from the softening jack-up market.
Ensco expects the first of its seven new 8500 Series ultra-deepwater semis, ENSCO 8500 to commence operations in June after final testing and outfitting.
The company believes that contributions from its deepwater fleet would begin to meaningfully impact its results over the course of the year, and would become even more significant over the next several years as new rigs are added to the fleet.