Post Earnings Coverage as Rowan’s Q4 Results Beat Estimates

Upcoming AWS Coverage on Concho Resources Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 14, 2017 / Active Wall St. announces its post-earnings coverage on Rowan Cos. PLC (NYSE: RDC). The Company posted its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full year fiscal 2016 (FY16) on February 24, 2017. The Houston, Texas-based Company’s quarterly revenues were down on a year-over-year basis; however it outperformed market consensus estimates. Register with us now for your free membership at:

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One of Rowan Cos.’ competitors within the Oil & Gas Drilling & Exploration space, Concho Resources Inc. (NYSE: CXO), reported on February 21, 2017, its financial and operating results Q4 and full year of 2016. AWS will be initiating a research report on Concho Resources in the coming days.

Today, AWS is promoting its earnings coverage on RDC; touching on CXO. Get our free coverage by signing up to:

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Earnings Reviewed

In Q4 FY16, Rowan’s revenues declined to $351.8 million from $535.8 million recorded at the end of Q4 FY15. However, revenue numbers for Q4 FY16 beat market consensus estimates by $344.55 million. The Company’s 34% y-o-y decline in its quarterly revenues is primarily attributed to a 41% decline in the Deepwater segment and a 30% decline in the Jack-up segment.

The oil drilling Company posted net loss of $24.4 million, or $0.19 loss per diluted share, in Q4 FY16, against net income of $124.4 million, or $0.99 per diluted share, in Q4 FY15. Meanwhile, the Company reported non-GAAP net income of $9.2 million, or $0.08 per diluted share, in Q4 FY16, compared to $119.1 million, or $0.95 per diluted share, in Q4 FY15. Wall Street had estimated the Company to report non-GAAP net loss of $0.06 per diluted share. Furthermore, the quarterly earnings per share for Q4 FY15 included benefit arising from the sale of the Rowan Louisiana of $6.3 million (after tax), or $0.05 per share, and a $1.0 million loss on extinguishment of debt (after tax), or $0.01 per share.

In full year FY16, the Company reported revenues of $1.84 billion compared to $2.14 billion in FY15. The Company’s net income surged during FY16 to $320.6 million, or $2.55 per diluted common share, from $93.3 million, or $0.75 per diluted common share, in FY15. Meanwhile, the Company’s adjusted net income for FY16 was $264.7 million, or $2.11 per diluted share, compared to $442.0 million, or $3.53 per diluted share in FY15.

Operating Metrics

During the reported quarter, Rowan’s direct operating costs were $179.9 million versus $235.8 million in the last year’s comparable quarter. Selling, general, and administrative expenses during Q4 FY16 came in at $25.6 million compared to $27.4 million in Q4 FY15. Furthermore, total costs and expenses were down to $310.6 million in Q4 FY16 from $355.6 million in the prior year’s comparable period. The Company reported income from operations of $41.2 million in Q4 FY16, which was lower than the $180.2 million reported in the prior quarter.

During Q4 FY16, the Company’s total available rig days were 2,576 compared to 2,618 in Q4 FY15. In the reported quarter, the Company’s total operating rig days were 1,665 compared to 2,106 in previous year’s same period. Furthermore, total fleet utilization during Q4 FY16 was 65% compared to 80% in Q4 FY15. Additionally, the overall dayrate of all rigs was $207,600 in Q4 FY16 compared with $250,100 in Q4 FY15.

Segment-wise

Rowan’s total Deepwater revenues for Q4 FY16 came in at $128.5 million compared to $218.1 million reported in the year ago comparable quarter. The segment’s income from operations for Q4 FY16 stood at $53.2 million versus $120.6 million in Q4 FY15. The segment operated at a utilization rate of 75% in Q4 FY16, down from 95% in the prior year’s same quarter. Furthermore, the Company’s Deepwater rigs had a day rate of $464,500 in Q4 FY16 compared with $623,300 in the year ago corresponding quarter.

In Q4 FY16, Jack-ups revenues declined to $223.3 million from $317.7 million in Q4 FY15. The segment’s income from operations also fell to $14.8 million in Q4 FY16 from $90.2 million in the last year’s same quarter. Jack-up utilization rate was 63% in Q4 FY16 compared to 78% in the previous year’s comparable period. Additionally, the segment had day rate of $156,600 in Q4 FY16 versus $176,300 in Q4 FY15.

Balance Sheet

In the year ended on December 31, 2016, Rowan generated $900.6 million of cash from its operating activities compared to $996.9 million in the previous year’s comparable quarter. As on December 31, 2016, the Company had cash and cash equivalents balance of $1.26 billion compared to $484.2 million as on December 31, 2015. Furthermore, the Company reported long-term debt amounting to $2.55 billion as on December 31, 2016, compared to $2.69 billion as on December 31, 2016.

Stock Performance

On Monday, March 13, 2017, the stock closed the trading session at $15.75, slightly up by 0.70% from its previous closing price of $15.64. A total volume of 2.63 million shares have exchanged hands. Rowan Cos.’ stock price surged 17.19% in the past six months. Shares of the company have a PE ratio of 6.22 and currently have a market cap of $1.98 billion.

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