Helmerich & Payne Inc. Reports Operating Results (10-Q)
Helmerich & Payne Inc. has a market cap of $6.53 billion; its shares were traded at around $60.95 with a P/E ratio of 14.1 and P/S ratio of 2.6. The dividend yield of Helmerich & Payne Inc. stocks is 0.5%. Helmerich & Payne Inc. had an annual average earning growth of 27.1% over the past 10 years. GuruFocus rated Helmerich & Payne Inc. the business predictability rank of 4.5-star.
Highlight of Business Operations:We reported income from continuing operations of $144.3 million ($1.32 per diluted share) from operating revenues of $732.6 million for the first quarter ended December 31, 2011, compared with income from continuing operations of $104.4 million ($0.96 per diluted share) from operating revenues of $594.6 million for the first quarter of fiscal year 2011. In the first quarter of fiscal year 2011, we had a net loss from discontinued operations of $0.2 million with no effect on a per diluted share basis. Including discontinued operations, we recorded net income of $144.3 million ($1.32 per diluted share) for the first quarter ended December 31, 2011, compared to net income of $104.2 million ($0.96 per diluted share) for the first quarter ended December 31, 2010. Income from continued operations for the first quarter of fiscal 2012 includes approximately $3.0 million ($0.03 per diluted share) of after-tax gains from the sale of assets. Income from continued operations for the first quarter of fiscal 2011 includes approximately $1.7 million ($0.02 per diluted share) of after-tax gains from the sale of assets.
The following tables summarize operations by reportable operating segment for the three months ended December 31, 2011 and 2010. Operating statistics in the tables exclude the effects of offshore platform and international management contracts, and do not include reimbursements of out-of-pocket expenses in revenue, expense and margin per day calculations. Per day calculations for international operations also exclude gains and losses from translation of foreign currency transactions. Segment operating income is described in detail in Note 12 to the Consolidated Condensed Financial Statements.
U.S. Land segment operating income increased to $224.7 million for the first quarter of fiscal 2012 compared to $158.4 million in the same period of fiscal 2011. Revenues were $617.8 million and $476.8 million in the first quarter of fiscal 2012 and 2011, respectively. Included in U.S. land revenues for the three months ended December 31, 2011 and 2010 are reimbursements for out-of-pocket expenses of $54.6 million and $46.4 million, respectively.
International Land segment operating income for the first quarter of fiscal 2012 was $7.9 million, compared to operating income of $14.4 million in the same period of fiscal 2011. Included in International land revenues for the three months ended December 31, 2011 and 2010 are reimbursements for out-of-pocket expenses of $7.0 million and $4.0 million, respectively.
Our contract drilling backlog, being the expected future revenue from executed contracts with original terms in excess of one year, as of December 31, 2011 and September 30, 2011 was $4.2 billion and $3.8 billion, respectively. The increase in backlog at December 31, 2011 from September 30, 2011 is primarily due to the expected revenue on 17 multi-year contracts announced in November 2011. Approximately 72.9 percent of the December 31, 2011 backlog is not reasonably expected to be filled in fiscal 2012. Term contracts customarily provide for termination at the election of the customer with an early termination payment to be paid to us if a contract is terminated prior to the expiration of the fixed term. However, under certain limited circumstances, such as destruction of a drilling rig, bankruptcy, sustained unacceptable performance by us, or delivery of a rig beyond certain grace and/or liquidated damage periods, no early termination payment would be paid to us. In addition, a portion of the backlog represents term contracts for new rigs that will be constructed in the future. We obtain certain key rig components from a single or limited number of vendors or fabricators. Certain of these vendors or fabricators are thinly capitalized independent companies located on the Texas Gulf Coast. Therefore, disruptions in rig component deliveries may occur. Accordingly, the actual amount of revenue earned may vary from the backlog reported. See the risk factors under Item 1A. Risk Factors of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on November 23, 2011, regarding fixed term contract risk, operational risks, including weather, and vendors that are limited in number and thinly capitalized.
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