Rising revenue was not enough for S&P 500 (NYSE:SPY) component Rowan Companies Inc. (NYSE:RDC) as the oil and gas drilling and exploration company saw profit fall in the fourth quarter. Rowan Companies provides international and domestic contract drilling services, as well as equipment for the drilling, mining and timber industries.
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Rowan Companies Earnings Cheat Sheet for the Fourth Quarter
Results: Net income for the oil and gas drilling and exploration company fell to $45.1 million (36 cents per share) vs. $57.3 million (45 cents per share) a year earlier. This is a decline of 21.3% from the year-earlier quarter.
Revenue: Rose 31.9% to $275.1 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: Rowan Companies Inc. beat the mean analyst estimate of 31 cents per share. Analysts were expecting revenue of $270.3 million.
Quoting Management: “Consistent with our efforts over the past several years to diversify our markets geographically, we have also made the decision to redomicile the Company to the UK, where we have a substantial management presence overseeing our operations in the North Sea and Egypt, which together are expected to represent our largest source of revenues in 2012. Having our board and management meetings in the UK, with its central location between the Middle East and the Gulf of Mexico – our second and third largest revenue areas – will improve our ability to manage those operations and communicate with our customers and regional management teams. We do not expect our U.S. employment to be impacted by this move. Rather, we believe this transaction will position the Company competitively to increase its earnings power over the long term so that we can continue to grow our fleet and employment opportunities in all the markets in which we operate.”
The company reported a profit decrease last quarter, breaking a two-quarter streak of profit increases. Net income rose more than twofold in the third quarter and more than fivefold in the second quarter.
The company topped expectations last quarter after falling short of forecasts in the third quarter with net income of 25 cents versus a mean estimate of net income of 39 cents per share.
Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from 83 cents a share to 66 cents over the last ninety days. For the fiscal year, the average estimate has moved down from $1.33 a share to $1.17 over the last ninety days.
(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
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