(By Balaseshan) Helmerich & Payne Inc. (NYSE: HP), a contract drilling company, reported a 10.6% increase in quarterly earnings on higher drilling activity at its U.S. land operations. Results exceeded Street's expectations.
Earnings from continuing operations for the first quarter were $159.61 million or $1.48 per share, up from $144.30 million or $1.32 per share last year. This year's results included $0.08 per share of after-tax gains related to the sale of used drilling assets and investment securities.
Revenue climbed 15.3% to $844.57 million.
Analysts, on average, polled by Thomson Reuters had expected a profit of $1.29 per share on revenue of $826.61 million for the first quarter.
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In the previous fourth quarter, the company posted earnings per share (EPS) from continuing operations of $1.46 on revenue of $829.45 million.
Revenue from U.S. land drilling increased 12.7% to $696.03 million, while offshore drilling revenue grew 13.6% to $57.72 million. International land drilling revenue jumped 43.7% to $87.27 million, while other revenue marginally rose 8.4% to $3.56 million.
In the U.S. land operations, revenue days rose to 21,743 from 20,968, while average rig revenue per day increased to $28,040 from $26,861.
In the offshore operations, revenue days increased 5.6%, while average rig revenue per day grew 15.5%. In the International land operations, revenue days jumped 29.4%, while average rig revenue per day climbed 14.3%.
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As of January 31, 2013, the company's existing fleet included 296 land rigs in the U.S., 29 international land rigs and nine offshore platform rigs.
In addition, Helmerich & Payne is scheduled to complete another 5 new H&P-designed and operated FlexRigs under long-term contracts with customers. Upon completion of these commitments, the company's global fleet is expected to have a total of 330 land rigs, including 299 FlexRigs.
The company also said it has agreed to build and operate three additional FlexRigs in the U.S. with two exploration and production companies. The three rigs will be built under multi-year term contracts and are expected to generate attractive economic returns. Including the new builds, five contracted FlexRigs remain to be delivered.
HP closed Wednesday's regular session up 1.20% at $63.33. The stock has been trading between $38.71 and $64.36 for the past 52 weeks.