Helmerich & Payne returns to profit on higher rig margins
The drilling contractor reported consolidated revenue of $1.035 billion for the third quarter.
Helmerich & Payne (HP) reported a return to profitability in the third quarter as revenue and margins climbed across its primary operating segments.
The results marked a recovery from a net loss in the previous quarter, driven by increased rig deployment in North America and narrowing losses in international operations. The company also benefited from a one-time gain of approximately $115 million related to the sale of Utica Square.
Consolidated revenue rose to $1.035 billion, up from $932 million in the second quarter. Net income attributable to the company was $76 million, or $0.74 a share, compared to a net loss of $59 million, or $0.59 a share, in the prior quarter. Consolidated adjusted EBITDA increased to $236 million from $178 million.
North America Solutions operating income rose to $140 million from $111 million in the second quarter. Direct margins for the segment increased to $241 million, with per-day margins rising by more than $1,000 sequentially to $18,669. The company deployed 10 additional rigs in North America during the period to meet demand from private operators.
International Solutions narrowed its operating loss to approximately $54 million from a loss of $100 million in the prior quarter. Direct margin for the segment improved to $31 million from $11 million. The company secured contracts for five additional rigs in Argentina, including three to be exported from the U.S. later this year.
Offshore Solutions operating income increased to approximately $17 million from $14 million in the second quarter. The offshore backlog strengthened to $3.6 billion following a four-year contract renewal in Norway.
For the fourth quarter, the company projects North America Solutions direct margin between $245 million and $255 million with an average of 145 to 151 rigs. International Solutions direct margin is projected at $25 million to $45 million with 60 to 70 average rigs. Offshore Solutions direct margin is expected to be between $26 million and $30 million.
Helmerich & Payne introduced new company-wide initiatives focused on increasing efficiency, reducing costs, and streamlining support functions to enhance margins and accelerate deleveraging.