Bristow Group: A Few Thoughts On The Company's Upcoming Earnings

Aug. 1.14 | About: Bristow Group (BRS)

Summary

Analysts expect BRS to earn $1.08/share in terms of EPS when the company announces its FQ1 results on August 4.

If BRS can demonstrate a steady increase in its adjusted net income, then it should have no problem exceeding earnings estimates during the second quarter.

Recent trend behavior could improve during the second half of the year if BRS can meet and/or exceed analysts' earnings expectations for the upcoming quarter.

When it comes to a company's earnings, I always find it necessary to determine what needs to occur in order for that company to meet and/or exceed analysts' expectations. With that said, I wanted to take a closer look and share my thoughts on what needs to happen in order for Bristow Group (NYSE:BRS) to deliver a fairly solid quarter when the company announces its results on August 4.

Company Overview

Headquartered in Houston, Texas, Bristow Group Inc. provides helicopter services to the offshore energy industry in Europe, West Africa, North America, Australia, and internationally. Its helicopters are used principally to transport personnel between onshore bases and offshore production platforms, drilling rigs, and other installations, as well as to transport time-sensitive equipment to these offshore locations.

Recent Trend Behavior

On Wednesday, shares of BRS, which currently possess a market cap of $2.58 billion, a forward P/E ratio of 12.10, and a PEG ratio of 0.95, settled at a price of $72.42/share. Based on a closing price of $72.42/share, shares of BRS are trading 4.02% below their 20-day simple moving average, 5.09% below their 50-day simple moving average, and 4.37% below their 200-day simple moving average.

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Although these numbers indicate both a short-term and a long-term downtrend for the stock, which generally translates into a selling mode for most near-term traders and many long-term investors, I strongly believe the company's trend behavior will begin to improve even after it announces its FQ1 results on August 4.

Upcoming Earnings Outlook

When it comes to the company's upcoming FQ1 earnings, there are a number of things potential investors should consider. For instance, analysts currently calling for BRS to earn $1.08/share in terms of EPS (which is $0.27/share lower than what the company had reported during FQ4 and $0.03/share higher than what the company had reported during the year-ago period) and $451.31 million in terms of revenue when its quarterly results are released on August 4.

In order to meet and/or exceed its quarterly EPS estimates, I'd like to see a 2%-to-4% increase in the company's FQ1 adjusted EBITDAR (as compared to FQ4's adjusted EBITDAR of $122.9 million), a 2%-to-3% increase in the company's FQ1 adjusted Net Income (as compared to FQ4's adjusted Net Income of $49.1 million) and lastly, a 2%-to-3% increase in the company's FQ1 gross revenue (as compared to FQ4's gross revenue of $440.9 million).

Recent Dividend Behavior

On Wednesday, May 21, Bristow Group announced a quarterly dividend increase of $0.07/share, which brought its most recent dividend payout to $0.32/share. It should be noted that the increase was paid on June 19 for shareholders of record as of June 5. This boost represented a 28% increase from its prior dividend of $0.25/share, which was paid to investors in March of 2014.

If the company can demonstrate a sustainable increase of at least 3%-to-5% in terms of its current cash position over the next 12 months, I see no reason why an increase in its dividend wouldn't occur. With that said, I expect the company's next quarterly payout to be in-line with the June payout, however I also foresee its next dividend hike taking place in June 2015.

Conclusion

For those of you who may be considering a position in Bristow Group, I'd continue to keep an eye on the company's dividend behavior over the next 12 months, as well as its ability to meet and/or exceed analysts expectations when it announces earnings on August 4. If the company can demonstrate steady increase in its net income, its adjusted EBITDAR, and its gross revenues I see no reason why analysts' expectations can't be met or even slightly exceeded.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.