Yesterday, 6:38 PM
- Credit Suisse says the recent rally in oil prices and in oilfield services stocks (NYSEARCA:OIH) is a classic dead cat bounce, and that as soon as U.S. storage gets full - and it is close - crude prices will fall, bringing expectations and stocks down with it.
- The firm says its sector outlook is increasingly negative as companies report increased pricing pressure, a record drop in the activity barometer of the rig count, and offshore rigs and projects confronting headwinds that could take a couple of years to fix.
- Relevant stocks: SLB, HAL, BHI, CAM, HLX, SPN, NOV, FET, DRQ, FTI, OIS
Tue, Feb. 17, 3:19 PM
- Helix Energy Solutions (HLX -12.4%) plunges to 52-week lows after reporting Q4 earnings that fell 78% Y/Y and came in well short of analyst expectations, and revenues fell 8.6% Y/Y and also missed estimates.
- HLX cited two unexpected events: a supply boat that collided with its Q4000 vessel and impaired its riser system for an extended time, and another vessel that was out of work for 59 days because of a late job cancellation.
- Q4 revenues in the Well Intervention segment fell 41% Y/Y as vessel utilization fell to 64% from 95% in Q3, and Robotics segment revenues slid 39% as vessel utilization dropped to 79% from 90% in Q3.
- CEO Owen Kratz said during today's earnings conference call that 2015 likely will be a difficult year and producers are canceling offshore contracts despite termination fees; however, HLX probably will not make deep cuts to its workforce of 1,600 after shrinking GS&A costs when it reorganized itself and sold off non-core assets in recent years.
Tue, Feb. 17, 12:44 PM
Tue, Jan. 6, 7:57 AM
- In a presentation for investors, Helix Energy Solutions (NYSE:HLX) confirms it is on track to report 2014 EPS of $1.85-$1.95 vs. $1.04 in 2013 while expecting EBITDA of at least $390M, up 30% Y/Y, but does not provide revenue or EPS guidance for 2015, saying only that next year's results likely will be impacted by customer spending cuts.
- HLX projects 2014 revenues of $1.1B, mostly from its well intervention ($670M) and robotics ($410M) segments.
- The slide in oil prices likely means E&P spending will be reduced significantly across the supply chain, HLX says, with exploration budgets more severely hit than production-related spending; the company notes its core well intervention business is more directly impacted by production spending, so it sees relatively good news for this particular element of its industry outlook.
Nov. 26, 2014, 11:36 AM
- Helix Energy Solutions (HLX -4.1%) is downgraded to Equal Weight from Overweight with a $31 price target at Morgan Stanley due to lower oil prices, driving down free cash flow and thus spending levels.
- While noting that most of HLX’s intervention vessels have 1-5 years of backlog, Stanley sees risk around its Seawell and Skandi Constructor vessels, which have limited backlog in 2015.
- The firm maintains its favorable view of HLX’s well intervention business model, which it sees as largely insulated from weakness in the offshore rig market, levered to defensive life-of-field work, and poised to take market share from rigs, given increased efficiencies and lower building costs.
Oct. 21, 2014, 10:35 AM
- Helix Energy (HLX +5.9%) opens with strong gains after Q3 earnings and revenues easily beat Wall Street expectations, as both its well intervention and robotics businesses thrived.
- In its earnings conference call, HLX says it sees FY 2014 EPS of $1.85-$1.95 vs. $1.80 analyst consensus estimate and revenues of $1.1B vs. $1.09B consensus.
- Total backlog as of Sept. 30 was ~$2.4B, nearly all in the well intervention and robotics businesses; total 2014 capex is forecast at $385M, with $242M incurred YTD.
Oct. 20, 2014, 5:32 PM| Comment!
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May. 27, 2014, 12:27 PM
- North Atlantic Drilling's (NADL +8.9%) deal with Rosneft (RNFTF) is particularly good news for Seadrill (SDRL +1.5%), Cowen's J.B. Lowe says, as SDRL gains a foothold into the Russian market, adds significant backlog during the market downturn and monetizes part of its North Atlantic Drilling investment; also, a cash infusion is a positive given growing concern over SDRL’s ability to pay its dividend.
- Morgan Stanley’s Ole Slorer thinks the deal is good for the entire industry, seeing the reduction in near term rig availability as an important turning point for the entire offshore driller space; it also expects further contract signings in Brazil and west Africa to help reverse current beaten down sentiment.
- Lowe likes Transocean (RIG +1.6%) among drillers in the North Sea, where the number of rigs will drop as NADL's rigs head to Russia, while Slorer recommends laggards with limited business in Brazil, such as Helix Energy (HLX), Oceaneering (OII) and Frank’s International (FI).
Apr. 21, 2014, 5:46 PM| Comment!
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