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Thursday, November 05, 2009
Toby Shute :: Townhall.com Columnist
This Driller Stacks Up Nicely
by Toby Shute
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If this is what a trough quarter looks like, then Rowan Companies (NYSE: RDC) ought to have a bright future indeed.

The contract driller and manufacturer, which is quite levered to the shallow water drilling market, naturally had some less-than-stellar results to report for the period ended September 30. In the drilling business, revenue dropped 28% from the prior year, margins eroded a touch, and income was cut in half.

How does that stack up to peers? Well, we saw Hercules Offshore 's (Nasdaq: HERO) domestic offshore revenue plungeby 83%, contributing to a loss for the quarter. Pride International (NYSE: PDE) turned in a subpar performanceof its own, with revenue off 17% and earnings from operations down 46%. Ensco International (NYSE: ESV) saw revenue drop more than 30% and per-share earnings nearly halved.

Hercules, working for relative table scraps for Gulf of Mexico operators like Chevron (NYSE: CVX) and Stone Energy (NYSE: SGY), is an easy mark, but the Pride and Ensco comparisons are rather interesting. Pride, with a fleet stuffed full of deepwater rigs, barely fared any better than Rowan. Ensco, which I've championed for a long time now, only ever-so-slightly bested Rowan's 59% offshore utilization.

So well done there, Rowan. I knew you had great depth. Whenever the market turns (recent increased bidding activity for premium jackups in the UK North Sea is a good start), you'll benefit handsomely. In the meantime, it's nice to see that Rowan can do better than just tread water.

This article was originally published as This Driller Stacks Up Nicelyon Fool.com

Copyright © 2009 The Motley Fool, LLC. All rights reserved.
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About The Author

Toby Shute is a Motley Fool contributor.

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