GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

Hercules Offshore Inc. Reports Operating Results (10-Q)

October 25, 2012 | About:
10qk

10qk

18 followers
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

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 3.5/5 (2 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK