Helmerich & Payne, Inc. HP reported a fiscal first-quarter 2025 adjusted net income of 71 cents per share, which topped the Zacks Consensus Estimate of 69 cents. The outperformance can be attributed to exceptional North America Solutions segment results.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
However, the bottom line compared unfavorably with the year-ago quarter’s reported figure of 97 cents per share. This was due to weakness in the company's International Solutions segment.
Operating revenues of $677.3 million missed the Zacks Consensus Estimate of $691 million. In particular, sales from the Drilling Services totaled $674.6 million, which missed the consensus mark of $688 million.
Helmerich & Payne, Inc. Price, Consensus and EPS Surprise
Helmerich & Payne, Inc. Price, Consensus and EPS Surprise
Helmerich & Payne, Inc. price-consensus-eps-surprise-chart | Helmerich & Payne, Inc. Quote
HP’s board of directors declared a quarterly cash dividend of 25 cents per share to its common shareholders of record as of Feb. 14, and the payout will be made on Feb. 28.
In fiscal year 2025, the company expects its North America Solutions segment to continue generating significant cash flows. The company also believes that cash generated due to the lower Capex outlook and KCA Deutag's cash flow from operations will be used to reduce debt and provide competitive dividends to its shareholders.
HP’s Segmental Performance
North America Solutions: Operating revenues of $598.1 million increased a marginal 0.7% year over year, driven by market share accretion, with the average number of active rigs at 149. However, the top line missed the Zacks Consensus Estimate of $608 million as activity levels remain subdued.
Operating profit totaled $152 million compared with $144.5 million in the prior-year period, due to lower expenses. Moreover, the reported figure beat our estimate of $146 million.
International Solutions: Operating revenues of $47.5 million decreased 13.6% from the year-ago quarter’s level of $54.8 million and missed our projection of $51 million due to weakness in the key Saudi Arabia market.
Operating loss reached $15.2 million, compared to a profit of $5.4 million in the fiscal first quarter of 2024. The figure was also wider than the consensus mark for a loss of $6.2 million on start-up costs related to Helmerich & Payne’s Saudi Arabia operations.
Offshore Gulf of Mexico (Offshore Solutions): Revenues of $29.2 million increased 14.4% from the year-ago quarter’s level of $25.5 million but marginally missed our projection of $29.3 million.
Operating profit totaled $3.5 million, increasing 15% from that recorded in the prior-year period. The figure missed our estimate of $4.2 million. This was primarily on account of issues associated with the timing of some material and supply expenses.
HP’s Financial Position
In the reported quarter, this Zacks Rank #3 (Hold) company spent $106.5 million on capital programs. As of Dec. 31, 2024, the company had $391.2 million in cash and cash equivalents, while the long-term debt totaled $1.8 billion (debt-to-capitalization of 37.7%). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
HP’s Guidance for Q2 Fiscal 2025
In the second quarter of fiscal year 2025, Helmerich & Payne expects operating gross margin to be in the range of $240-$260 million and $6-$8 million for North America Solutions and Gulf of Mexico (Offshore Solutions) legacy operations, respectively. The company anticipates ending the quarter with 146-152 contracted rigs for North America Solutions.
HP expects International Solutions' direct margins (for the legacy business) to be between $7 million and $3 million, exclusive of any foreign exchange gains or losses. The company expects KCA Deutag's contributions to its Gulf of Mexico’s (Offshore Solutions) direct margins to be in the band of $18-$25 million.
Helmerich & Payne estimates a capital outlay to be in the range of $360 to $395 million for fiscal year 2025. The company anticipates that ongoing asset sales, including reimbursements for lost and damaged tubulars and sales of other used drilling equipment, will offset a portion of these expenditures and are projected to total $45 million in the fiscal year 2025.
The company still expects depreciation and amortization expenses to be $400 million, as the purchase price accounting of the KCA Deutag acquisition has not yet been integrated. Research and development expenses are expected to total $32 million. General and administrative expenses are anticipated to be $280 million. Cash taxes are anticipated to be in the $190-$240 million range.
Important Energy Earnings
Let’s glance through a few key earnings releases this season.
Liberty Energy LBRT, the Denver, CO-based oil and gas equipment company, announced a fourth-quarter 2024 adjusted net income of 10 cents per share, which marginally beat the Zacks Consensus Estimate of 9 cents. This was primarily due to a year-over-year decrease in costs and expenses. LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 54 cents due to poor equipment and service execution, along with lower activity.
Ahead of the earnings release, Liberty’s board of directors announced a quarterly dividend of 8 cents per common share payable on March 20 to its stockholders of record as of March 6.
In the quarter, Liberty returned $175 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Baker Hughes Company BKR, one of the world’s largest oilfield service providers, reported fourth-quarter 2024 adjusted net income per share of 70 cents, topping the Zacks Consensus Estimate of 63 cents; it also outperformed the year-ago quarter profit of 51 cents. The strong quarterly earnings were primarily driven by higher operational performance across its segments and improved EBITDA margins.
Baker Hughes generated a free cash flow of $894 million in the reported quarter compared with $633 million a year ago. As of Dec. 31, 2024, it had cash and cash equivalents of $3,364 million. The company had a long-term debt of $5,970 million at the end of the reported quarter, marking a debt-to-capitalization of 26.1%.
Meanwhile, energy infrastructure provider Kinder Morgan KMI reported fourth-quarter adjusted earnings per share of 32 cents, missing the Zacks Consensus Estimate of 33 cents. The bottom line improved from 28 cents in the prior-year quarter.
Total quarterly revenues of $3.99 billion missed the Zacks Consensus Estimate of $4.16 billion. The top line decreased from $4.04 billion in the prior-year quarter.
The lower-than-expected quarterly earnings were primarily due to decreased volumes on certain systems, asset divestitures, and lower crude, CO2 and NGL volumes.
As of Dec. 31, 2024, KMI reported $88 million in cash and cash equivalents. At the quarter's end, its long-term debt amounted to $29.8 billion. For 2025, Kinder Morgan projects a net income of $2.8 billion, up 8% from the 2024 level, and an adjusted EPS of $1.27, up 10%. The company expects to declare dividends of $1.17 per share, up 2% from the prior-year figure.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
