Rowan Companies Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Rowan Companies, Inc. (NYSE:RDC) will unveil its latest earnings on Wednesday, October 31, 2012. Rowan Companies provides international and domestic contract drilling services, as well as equipment for the drilling, mining and timber industries.

Rowan Companies, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 48 cents per share, a rise of 92% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 66 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 51 cents during the last month. For the year, analysts are projecting profit of $2.14 per share, a rise of 91.1% from last year.

Past Earnings Performance: Last quarter, the company reported net income of 51 cents per share versus a mean estimate of profit of. The company has beaten estimates for the past three quarters.

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A Look Back: In the second quarter, profit fell 89.4% to $49.4 million (40 cents a share) from $465.9 million ($3.65 a share) the year earlier, but exceeded analyst expectations. Revenue rose 57.1% to $351 million from $223.5 million.

Wall St. Revenue Expectations: On average, analysts predict $342.3 million in revenue this quarter, a rise of 45.8% from the year-ago quarter. Analysts are forecasting total revenue of $1.38 billion for the year, a rise of 46.9% from last year’s revenue of $939.2 million.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 3.28 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

Key Stats:

On the top line, the company is looking to build on last quarter’s revenue increase, which snapped a string of revenue drops. Revenue fell 46.4% in the third quarter of the last fiscal year, 40% in the fourth quarter of the last fiscal year and 8.5% in the first quarter before climbing in the second quarter.

The company is hoping to rebound with this earnings release after a net income drop last quarter. Net income rose 54.4% in the first quarter before dropping in the second quarter.

Stock Price Performance: Between August 1, 2012 and October 25, 2012, the stock price fell $2.46 (-6.9%), from $35.70 to $33.24. The stock price saw one of its best stretches over the last year between October 10, 2012 and October 18, 2012, when shares rose for seven straight days, increasing 7.4% (+$2.38) over that span. It saw one of its worst periods between October 18, 2012 and October 24, 2012 when shares fell for five straight days, dropping 5.5% (-$1.89) over that span.

Analyst Ratings: With 11 analysts rating the stock as a buy, one rating it as a sell and 11 rating it as a hold, there are indications of a bullish outlook.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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