Hercules Offshore Inc. (HERO) filed Quarterly Report for the period ended 2012-09-30.

Hercules Offshore, Inc. has a market cap of $797.6 million; its shares were traded at around $4.94 with and P/S ratio of 1.2.

Highlight of Business Operations:During the Current Quarter we generated an income tax provision of $0.7 million, for an effective rate of 1.9%, compared to an income tax benefit of $8.0 million, for an effective rate of 31.9%, during the Comparable Quarter. The decline in our effective tax rate related primarily to the profitability of certain entities in our offshore structure, as we do not provide a U.S. tax provision/benefit for income/losses that are generated in this structure. During the Current Quarter we generated $35.6 million of losses in our offshore structure, primarily related to the impairment of the Hercules 258, which significantly reduced the amount of tax benefit recorded in the Current Quarter.

Domestic Offshore. The rigs acquired from Seahawk contributed to $59.5 million of the increase in revenue from our Domestic Offshore segment. The remaining increase was due to increased operating days and average dayrates for the legacy Hercules rigs during the Current Period as compared to the Comparable Period, which contributed to an increase in revenue of approximately $36 million and $27 million, respectively.

International Liftboats. The increase in revenue from our International Liftboats segment resulted from an increase in average revenue per liftboat per day in the Current Period as compared to the Comparable Period contributing to an approximate $8 million increase in revenue. Partially offsetting this increase was an approximate $3 million decrease in revenue due to a decline in operating days in the Current Period as compared to the Comparable Period.

Domestic Offshore. The increase in operating expenses for our Domestic Offshore segment was due primarily to approximately $28 million related to the rigs acquired from Seahawk. The remaining increase was due to an increase in labor costs of $12.1 million in the Current Period as compared to the Comparable Period as well as gains on asset sales in the Comparable Period. These increases were partially offset by a $7.6 million decrease in costs associated with workers’ compensation.

During the Current Period we generated an income tax benefit of $22.0 million, for an effective rate of 14.4%, compared to an income tax benefit of $25.9 million, for an effective rate of 36.6%, during the Comparable Period. The decline in our effective rate related primarily to the profitability of certain entities in our offshore structure, as we do not provide a U.S. tax provision/benefit for income/losses that are generated in this structure. During the Current Period we generated $49.2 million of losses in our offshore structure, primarily related to the impairment of the Hercules 258, which significantly reduced the amount of tax benefit recorded in the Current Period.

Read the The complete Report

What Worked in the Stock Market for Long-Term Investors?

Extensive research has found that the companies with predictable revenues and earnings outperform the market average; they also suffer lower probability of loss. As a matter of fact, this kind of companies are exactly what Warren Buffett wants to buy and hold forever. Please read the research about what worked in the stock market:

Part I: What worked in the market from 1998-2008? Part I: Predictability Rank
Part II: Role of Valuations
Part III: Intrinsic Value, Discounted Cash Flow and Margin of Safety

More Gurufocus Links

Latest Guru Picks	Value Strategies
Warren Buffett Portfolio	Ben Graham Net-Net
Real Time Picks	Buffett-Munger Screener
Aggregated Portfolio	Undervalued Predictable
ETFs, Options	Low P/S Companies
Insider Trends	10-Year Financials
52-Week Lows	Interactive Charts
Model Portfolios	DCF Calculator
RSS Feed	Monthly Newsletters
The All-In-One Screener	Portfolio Tracking Tool