Hercules Offshore (HERO) delivered stellar growth to close out 2013. It reported Q4 (December) adjusted earnings of $0.14 per share, $0.06 better than the Capital IQ Consensus Estimate of $0.08; revenues rose 34.7% year over year to $235.3 million vs. the $232.71 million consensus.
Here are the highlights from this morning's earnings release:
- The company reported a loss from continuing operations of $100.8 million, or $0.63 per diluted share, on revenue of $235.3 million for the fourth quarter of 2013, compared to income from continuing operations of $2.4 million, or $0.01 per diluted share, on revenue of $174.7 million for the fourth quarter of 2012.
- As outlined in the reconciliation of GAAP to non-GAAP financial measures, fourth-quarter 2013 results include the following pre-tax items: $114.2 million non-cash impairment charge related to the cold stacked Hercules 153, Hercules 203, Hercules 206, and Hercules 250; $11.5 million loss on the sale of Hercules 170; $31.6 million gain from the insurance settlement on Hercules 265; and $29.3 million charge related to the early retirement of the company's 10.5% senior notes and issuance of the company's 7.5% senior notes.
- Revenue generated from domestic offshore for the fourth quarter of 2013 increased by 48.9% to $135.6 million from $91.1 million in the fourth quarter of 2012, as a result of higher dayrates. International offshore revenue increased to $63.5 million in the fourth quarter of 2013 from $49.8 million in the fourth quarter of 2012, which included a $10.0 million payment from Angola Drilling Company related to a prior contract on the Hercules 185.
Shares of Hercules Offshore traded as high as $4.90 pre-market, retracing some of the recent losses on very light volume of 12,677 shares. With the recent price action in Hercules shares registering a fresh 52-week low, and the equity throwing multiple regSHO violations for abusive naked short selling, it is evident that the short sellers -- as well as the recent analyst downgrading the company's equity -- are now on the wrong side of the trade. Hercules Offshore strongly solidified it's return to profitability with a beat on the top line and bottom-line earnings release.
All eyes will now turn to this morning's conference call as fresh interest in a long position should present itself, while short sellers will probably find it difficult to find shares for hypothecation. It is likely that most margin desks will now raise BIPS for remaining short Hercules Offshore by at least half a point.