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Parker Drilling Company Reports Operating Results (10-Q)

August 07, 2009 | About:

Parker Drilling Company (PKD) filed Quarterly Report for the period ended 2009-06-30.

Parker Drilling Company provides high-performance contract drilling solutions rental tools and project management services to the worldwide energy industry. Parker Drilling Company has a market cap of $538.5 million; its shares were traded at around $4.64 with a P/E ratio of 8 and P/S ratio of 0.7. Parker Drilling Company had an annual average earning growth of 3.7% over the past 10 years.

Highlight of Business Operations:

Operating margin was $27.3 million for the second quarter of 2009 as compared to $50.0 million for the second quarter of 2008, driven primarily by a $24.4 million decline in the U.S. Drilling operating margin and a $10.4 million decline in Rental Tool operating margin resulting from a downturn in drilling activity in their respective markets. This was partially offset by increases in the International Drilling, Project Management and Engineering Services and Construction Contract segments. The increased operating margin for International Drilling is primarily the result of a higher dayrate for our Caspian Sea Barge Rig 257 and further operating cost efficiencies. The increase in operating margin for Project Management and Engineering Services was due to operational improvements. The higher operating margin for Construction Contract reflects the increased construction activity on the BP-owned Liberty rig.

We recorded net income of $4.4 million for the three months ended June 30, 2009, as compared to net income of $21.9 million for the three months ended June 30, 2008. Gross margin was $27.3 million for the three months ended June 30, 2009 as compared to $50.0 million for the three months ended June 30, 2008.

Revenues in our Americas region increased by $5.7 million mainly due to Rig 121 in Mexico and Rig 268 in Colombia being fully operational during the current quarter as they did not become operational until later in 2008. Revenues in our CIS region decreased by $2.4 million primarily due to equipment change out in Western Kazakstan being partially offset by a higher dayrate for our barge rig operating in the Caspian Sea. In our Asia Pacific region, revenues decreased $3.8 million due to lower utilization.

Rental tools revenues decreased $12.3 million to $28.2 million during the current quarter as compared to the second quarter of 2008. Lower overall demand has led to increased discounting, impacting both revenues and gross margin. Rental tools operating gross margins, excluding depreciation and amortization, decreased $9.0 million to $15.4 million for the current quarter as compared to the second quarter of 2008.

Income tax expense was $5.1 million for the second quarter of 2009, as compared to income tax expense of $13.8 million for the second quarter of 2008 which includes the reversal of a $3.1 million reserve for 2007 foreign tax credits. The decrease in income tax expense in the second quarter of 2009, compared to the second quarter of 2008, was primarily due to lower pre-tax income in the second quarter of 2009, as a result of the factors described above as well.

We recorded net income of $6.5 million for the six months ended June 30, 2009, as compared to net income of $45.1 million for the six months ended June 30, 2008. Gross margin was $52.9 million for the six months ended June 30, 2009 as compared to $91.5 million for the six months ended June 30, 2008.

Read the The complete ReportPKD is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC.

Rating: 3.4/5 (5 votes)

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