Helmerich & Payne Q1 2020 Earnings Report
Key Takeaways
Helmerich & Payne, Inc. reported income of $31 million, or $0.27 per diluted share, on operating revenues of $615 million for the quarter ended December 31, 2019. The results reflect a decrease in U.S. Land revenue, offset by gains in international and offshore segments.
U.S. Land revenue decreased to $509 million, with a slight decrease in operating gross margins.
H&P continued to gain market share despite overall industry rig count decline.
The company's drilling automation technology, AutoSlide, has been commercially deployed in six U.S. shale basins.
Approximately 15% of the active U.S. FlexRig® fleet operated under non-traditional dayrate contracts.
Helmerich & Payne
Helmerich & Payne
Helmerich & Payne Revenue by Segment
Helmerich & Payne Revenue by Geographic Location
Forward Guidance
Helmerich & Payne anticipates flat-to-up U.S. Land revenue days, a decrease in international revenue days, and a decrease in offshore revenue days for the second quarter of fiscal 2020.
Positive Outlook
- U.S. Land quarterly revenue days are expected to be flat-to-up 1.5% sequentially.
- Average rig revenue per day is expected to be relatively flat sequentially in the range of $25,000-$25,500.
- Industry activity is expected to look similar to the average level experienced during the second half of calendar 2019, implying a modest increase from current levels.
- HPT segment solutions continue to gain momentum with customers, particularly AutoSlide.
- Balance sheet strength and level of free cash flow generation will allow the company to maintain industry leading returns to stockholders.
Challenges Ahead
- Quarterly revenue days are expected to decrease roughly 7% sequentially for International Land Operations.
- Average rig margin per day for International Land Operations is expected to decrease to $6,000-$7,000.
- Quarterly revenue days are expected to decrease by approximately 30% sequentially for Offshore Operations.
- The average rig margin per day for Offshore Operations is expected to decrease to $10,000-$11,000 due to rig demobilization and transition.
- Management contracts are expected to generate approximately $2 million in operating income.
Revenue & Expenses
Visualization of income flow from segment revenue to net income