Investors obviously liked the earnings report this week from Tulsa’s Helmerich & Payne as the company’s stock rose more than 12% following news of increased earnings.
Trading closed Tuesday with a gain of $4.36 or 12.02% per share settling at $40.62. It came after the company reported net income of $95 million or 94 cents a share from $677 million in operating revenues, much stronger than the previous quarter when it was $78 million and 77 cents a share.
“The Company performed well both operationally and financially during the first fiscal quarter of 2024 despite the persistent volatility in crude oil and natural gas prices. During the quarter, the Company’s stock price continued to trade as it has historically, with a strong correlation to crude oil prices and industry rig count,” stated John Lindsay, President and CEO.
The financial growth saw $175 million in net cash from operating activities during the first quarter, but it was down from the $215 million for the fourth quarter of fiscal year 2023.
H&P finished the December quarter at 151 active rigs which was toward the lower end of its guidance range. But Lindsay expects things to change because many E&P budgets are being reset in March. Until that happens, H&P anticipates a flat rig count for its operations.
“Given the outlook for a lower level of crude oil production growth in the U.S. in 2024, combined with the recent volatility in commodity prices, we expect our rig count will only grow modestly in fiscal 2024,” said Senior Vice President and CFO Mark Smith.
“That is something we had already contemplated as part of our fiscal 2024 capex budget, so we do not currently believe we need to modify our capex plans.”
Still, company leadership is confident, especially after recently getting preliminary notification of a seven super-spec FlexRigs contract for working in a Middle East drilling project. Delivery of the rigs is scheduled for the first half of fiscal 2025.
Smith also said the company recently contracted to provide an additional rig in Bahrain.
- The North America Solutions (“NAS”) segment exited the first quarter of fiscal year 2024 with 151 active rigs and experienced an increase in revenue per day of approximately $1,000/day to $38,300/day on a sequential basis, while direct margins(1) per day increased by approximately $1,200/day to $18,700/day
- The Company reported fiscal first quarter net income of $95 million, or $0.94 per diluted share; including select items(2) of $(0.03) per diluted share
- Quarterly NAS operating income increased $16 million sequentially, while direct margins(1) increased $17 million to approximately $256 million, as revenues increased by $19 million to $594 million and expenses increased by $2 million to $338 million
- H&P’s NAS segment anticipates exiting the second quarter of fiscal year 2024 between 154-159 active rigs
- The Company recently received preliminary notification of an award for seven super-spec rigs in the Middle East
- During the first fiscal quarter, the Company returned approximately $90 million of capital to shareholders as follows: $25 million in base dividends, $17 million in supplemental dividends and $47 million in share repurchases(3)
- On December 6, 2023, the Board of Directors of the Company declared a quarterly base cash dividend of $0.25 per share and a supplemental cash dividend of $0.17 per share; both dividends are payable on February 27, 2024 to stockholders of record at the close of business on February 13, 2024
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