Ensco (ESV) Q1 Loss Narrower Than Expected, Revenues Miss

Oil and natural gas driller Ensco plc (NYSE:ESV) reported diluted first-quarter 2017 loss (excluding one-time items) of 4 cents a share, substantially narrower than the Zacks Consensus Estimate of a loss of 12 cents. Notably, the company posted earnings of 74 cents a share in the year-earlier quarter.

Total revenue declined to $471.1 million from $814.0 million in the year-ago quarter. The top line also missed the Zacks Consensus Estimate of $473.03 million.

Segmental Performance

Floaters: Revenues were $284.8 million compared with $512.6 million last year. This was primarily because of fewer rig operating days and a decline in the average day rate to $336,636 from $364,771 a year ago.

Reported utilization was 47% compared with 64% last year. Adjusted for uncontracted rigs and planned downtime, operational utilization remained unchanged from last year at 99%.

Jackups: Revenues were $171.8 million compared with $277.9 million a year ago. This was mostly due to a decline in average day rates to $86,390 from $118,138 in the prior-year quarter. Fewer operating days for several jackups also contributed to the decrease in revenues.

Reported utilization was 64% compared with 66% in first-quarter 2016. Adjusted for uncontracted rigs and planned downtime, operational utilization in the reported quarter was 99.2% as against 99.8% a year ago.

Other: Revenues plummeted to $14.5 million from $23.5 million in first-quarter 2016. Contract drilling expenses, however, decreased to $13 million from $18 million a year ago.

Costs and Expenses

Depreciation expenses declined to $109.2 million from $113.3 million in first-quarter 2016. This was due to the extension of lives for certain contracted assets. General and administrative expenses increased to $26 million from $23.4 million last year, mainly due to higher compensation costs.

Balance Sheet and Capex

At the end of the first quarter, Ensco had $271.7 million in cash and cash equivalents. Long-term debt (including current maturities) was $4,905.9 million, with net debt-to-capitalization ratio coming in at 37.4%.

Zacks Rank

Ensco currently carries a Zacks Rank #3 (Hold). Some better-ranked from the same space are Diamond Offshore Drilling Inc. (NYSE:DO) , China Petroleum & Chemical Corporation (NYSE:SNP) and Bellatrix Exploration Ltd. (TO:BXE) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Diamond Offshore Drilling posted a positive earnings surprise of 341.67% in the preceding quarter. It topped estimates in all of the four trailing quarters with an average positive earnings surprise of 353.28%.

Bellatrix Exploration posted a positive earnings surprise of 240.00% in the preceding quarter. It surpassed estimates in three of the four trailing quarters with an average positive earnings surprise of 58.54%.

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