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Helmerich & Payne Inc. Reports Operating Results (10-Q)

February 08, 2013 | About:

Helmerich & Payne Inc. (NYSE:HP) filed Quarterly Report for the period ended 2012-12-31.

Helmerich & Payne, Inc. has a market cap of $6.84 billion; its shares were traded at around $64.27 with a P/E ratio of 11.8064 and P/S ratio of 2.1313. The dividend yield of Helmerich & Payne, Inc. stocks is 0.43%. Helmerich & Payne, Inc. had an annual average earning growth of 26.3% over the past 10 years. GuruFocus rated Helmerich & Payne, Inc. the business predictability rank of 2.5-star.

Highlight of Business Operations:

The following tables summarize operations by reportable operating segment for the three months ended December 31, 2012 and 2011. 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 10 to the Consolidated Condensed Financial Statements.

U.S. Land segment operating income increased to $234.4 million for the first quarter of fiscal 2013 compared to $224.7 million in the same period of fiscal 2012. Revenues were $696.0 million and $617.8 million in the first quarter of fiscal 2013 and 2012, respectively. Included in U.S. land revenues for the three months ended December 31, 2012 and 2011 are reimbursements for out-of-pocket expenses of $86.4 million and $54.6 million, respectively.

International Land segment operating income for the first quarter of fiscal 2013 was approximately $9.1 million compared to operating income of $7.9 million in the same period of fiscal 2012. Included in International land revenues for the three months ended December 31, 2012 and 2011 are reimbursements for out-of-pocket expenses of $7.8 million and $7.0 million, respectively.

Segment operating income increased primarily due to an increase in average rig revenue per day and total revenue days in the first quarter of fiscal 2013 compared to the same period of fiscal 2012. During the current quarter, an average of 24.6 rigs worked compared to an average of 19.0 rigs in the first quarter of fiscal 2012. However, the average rig margin per day in the first quarter of fiscal 2013 was negatively impacted primarily due to a rig temporarily not receiving any dayrate revenue while undergoing unexpected repairs.

Our contract drilling backlog, being the expected future revenue from executed contracts with original terms in excess of one year, as of December 31, 2012 and September 30, 2012 was $3.5 billion and $3.6 billion, respectively. Approximately 64.4 percent of the December 31, 2012 backlog is not reasonably expected to be filled in fiscal 2013. 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 21, 2012, regarding fixed term contract risk, operational risks, including weather, and vendors that are limited in number and thinly capitalized.

Read the The complete Report

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