Ensco Beats Q4 Earnings Estimates, Misses on Revenues - Analyst Blog
Oil and natural gas driller, Ensco plc (ESV) reported diluted fourth-quarter 2014 earnings of $1.68 a share (excluding one-time items), which surpassed the Zacks Consensus Estimate of $1.38. The figure however decreased from $1.70 earned in the year-earlier quarter.
Total revenue grew to $1,159.8 million from $1,138.0 million in the year-ago quarter. But this came below the Zacks Consensus Estimate of $1,171.0 million.
Segment Performance
Floaters: Revenues from floaters declined 5% to $663 million in the fourth quarter from $695 million a year ago. This was due to lower reported utilization and average day rates. The average day rate decreased 6% to $429,000. Reported utilization declined to 81% from 82% a year ago. Adjusted for uncontracted rig days and planned downtime, operational utilization was 90% compared with 92% a year ago.
Jackups: Revenues from this segment grew 6% to $454 million from $427 million a year ago, mostly attributable to the addition of three ENSCO 120 Series jackups to the active fleet. The average day rate increased $17,000 to $147,000. Reported utilization was 88% compared with 94% a year ago, primarily attributable to an increase in the number of uncontracted days year over year. Adjusted for uncontracted rig days and planned downtime, operational utilization in the reported quarter was 98% compared with 97% a year ago.
Other: Revenues increased to $42 million from $16 million in fourth-quarter 2013. Contract drilling expense increased to $34 million from $12 million a year ago.
Costs and Expenses
Depreciation expense was $139 million compared to $128 million in fourth-quarter 2013. The $11 million increase came mostly from adding four newbuild rigs. This was partially offset by an $8 million reduction in depreciation expense related to lower carrying values for floaters.
General and administrative expense in the reported quarter declined 20% year to year to $28 million, primarily due to lower discretionary compensation.
Balance Sheet and Capex
At the end of the fourth quarter, Ensco had $664.8 million in cash and cash equivalents. Long-term debt (including current maturities) was $5,885.6 million, with debt-to-capitalization ratio coming in at 42%.
Zacks Rank
Ensco currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the same sector include Valero Energy Partners L.P. (VLP), Golar Energy Partners LP (GMLP) and Hallador Energy Co. (HNRG). All these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
ENSCO PLC (ESV): Free Stock Analysis Report
HALLADOR ENERGY (HNRG): Free Stock Analysis Report
GOLAR LNG PARTN (GMLP): Free Stock Analysis Report
VALERO EGY PTNR (VLP): Free Stock Analysis Report
To read this article on Zacks.com click here.
