Rowan Companies (RDC) Posts Narrower-Than-Expected Q3 Loss

Rowan Companies plc (NYSE:RDC) reported adjusted third-quarter 2018 loss from continuing operations of $1.13 per share, narrower than the Zacks Consensus Estimate loss of $1.15. However, the quarterly loss was wider than the year-ago quarter's loss of 16 cents.

Total revenues were $193 million in the third quarter, down from $292 million in the prior-year quarter. On the flip side, the top line beat the Zacks Consensus Estimate of $179 million.

The decline in total revenue-producing rig days, fall in average dayrates and lower average utilization were responsible for the decline.

Dayrates and Utilization

The company's deepwater rigs recorded an average dayrate of $135,000, down from $476,600 in the year-ago quarter. Moreover, jackup rigs saw a dayrate of $115,900, down from $122,100 in the prior-year quarter.

The overall dayrate of all the rigs was $117,300 compared with $157,700 in third-quarter 2017. Also, average utilization of the company's rigs was 66% compared with 74% in the comparable quarter last year.

Total revenue-producing rig days declined 23.8% year over year to 1,395 in the third quarter.

Total Expenses

In the third quarter, the company reported $309.4 million in total costs, higher than $299.8 million in the year-ago quarter. The primary reason behind the increase in costs was 8.1% higher direct operating expenses (from $168.7 million to $182.3 million).

Financials

As of Sep 30, 2018, the company's cash balance was $1.0 billion and long-term debt was $2.3 billion. The long-term debt-to-capitalization ratio of the company was 31.2%.

Zacks Rank & Key Picks

Currently, Fort Worth, TX-based Rowan Companies has a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are Hess Corporation (NYSE:E) , Enbridge Inc (NYSE:E) and Eni SpA (NYSE:E) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

New York-based Hess is a global integrated energy company. It delivered an average positive earnings surprise of 230.5% in the last four quarters.

Headquartered in Calgary, Alberta, Enbridge is a leading energy infrastructure company. In the trailing four quarters, the company delivered an average positive earnings surprise of 33.2%.

Based in Rome, Italy, Eni is among the leading integrated energy players in the world. The partnership witnessed a negative earnings surprise of 0.3% in the preceding four quarters.

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