Rowan Companies Inc. is a major provider of international and domestic offshore contract drilling services. The Company also owns and operates a manufacturing division that produces equipment for the drilling mining and timber industries. Rowan Companies Inc. has a market cap of $2.06 billion; its shares were traded at around $18.19 with a P/E ratio of 4.2 and P/S ratio of 0.9. Rowan Companies Inc. had an annual average earning growth of 10.9% over the past 10 years.
Highlight of Business Operations:As indicated in the preceding table, our consolidated operating income increased by $50.5 million or 34%, when comparing the first quarters of 2009 and 2008, on a $9.3 million or 2% increase in revenues and a $41.2 million or 12% reduction in costs. See further discussion under segments below.
Net income includes income tax expenses of $67.9 million (34%) and $51.8 million (35%) for the first quarters of 2009 and 2008, respectively.
Our drilling operations generated a $40.0 million or 12% increase in revenues between periods. Our average offshore day rate was $173,600 during the first quarter of 2009, compared to $159,700 in the first quarter of 2008. Our offshore fleet was 93% utilized during the first quarter of 2009, compared to 91% in the first quarter of 2008, with much of the downtime in each period associated with rigs that were being prepared for long-term assignments. We realized 96 or 6% more revenue-producing days between periods primarily due to the addition of newbuild jack-ups Rowan-Mississippi and J.P. Bussell in November 2008, and foreign operations contributed 53% of the total revenues during the first quarter of 2009, down from 61% in the first quarter of 2008.
Drilling expenses during the first quarter of 2009 decreased by $11.1 million, or 7%, from the first quarter of 2008 due primarily to lower labor and related fringe benefit costs, repair and maintenance and insurance costs. Drilling depreciation expense increased by $7.6 million or 26% between periods due primarily to the rig additions discussed above. Selling, general and administrative expenses incurred by our Drilling segment decreased by $0.7 million or 4% between periods due primarily to lower incentive-based compensation expense.
Our Drilling operations included a $4.7 million net gain on property and equipment disposals during the first quarter of 2009, compared to $5.4 million during the first quarter of 2008. Both amounts relate primarily to the sale of non-core facilities.
Our Drilling Products and Systems operating results for the 2009 first quarter excludes $73 million of revenues and $53 million of expenses in connection with sales of products and services to our Drilling segment, most of which was attributable to construction of the newbuild jack-up, Ralph Coffman. Drilling Products and Systems operating results for the comparable quarter of 2008 excludes $79 million of revenues and $66 million of expenses, primarily for construction of the J.P. Bussell, Rowan-Mississippi and Ralph Coffman.
Read the The complete ReportRDC is in the portfolios of Robert Rodriguez of FPA Capital, Michael Price of MFP Investors LLC, Kenneth Fisher of Fisher Asset Management, LLC.