Helmerich & Payne Q3 2023 Earnings Report
Key Takeaways
Helmerich & Payne reported a net income of $95 million, or $0.93 per diluted share, from operating revenues of $724 million for the quarter ended June 30, 2023. The company's financial results demonstrated economic returns despite a decline in rig activity due to weak natural gas prices, emphasizing contract economics and capital allocation.
Net income for the third quarter of fiscal year 2023 was $95 million, or $0.93 per diluted share.
North America Solutions operating income decreased $13 million sequentially.
North America Solutions segment exited the quarter with 153 active rigs, with revenue per day increasing to $37,100/day.
The company repurchased approximately 3.2 million shares for roughly $103 million in the fiscal quarter.
Helmerich & Payne
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Helmerich & Payne Revenue by Segment
Helmerich & Payne Revenue by Geographic Location
Forward Guidance
Helmerich & Payne anticipates a slight decline in North America Solutions direct margins per day in the fourth fiscal quarter due to the natural gas driven decline in rig activity. The company expects to exit the fourth quarter with 141-147 active rigs in the North America Solutions segment.
Positive Outlook
- Expect to see an increase in contracting activity as customers refresh their capital budgets for 2024.
- Have already received indications they may increase activity.
- Believe there will be an increase in the demand for rigs relative to current levels due to fundamental supply and demand dynamics inherent in the industry.
- Have been able to remain firm on our contractual economics by working with customers on alternative contracting models, such as performance contracts.
- Anticipate this decline will be transitory based on expectations for rig additions and some term contract rollovers benefiting margins in the December ended quarter.
Challenges Ahead
- U.S. rig activity declines will likely continue into the September ended quarter.
- NAS margins in the fourth fiscal quarter to regress slightly.
- Rigs idled during the second half of our fiscal year have been mainly in the spot market and had contractual margins above the overall average.
- Macro-economic issues experienced earlier this calendar year lingered during our third fiscal quarter and were reflected at the company level by a declining rig count.
- Uncertainty around the macro-outlook for crude oil and natural gas prices maintained an underlying sense of apprehension in the U.S. drilling market during the quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income