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New rigs help Rowan beat profit estimates

Rowan Cos Plc reported a higher-than-expected quarterly profit as the driller retained customers by deploying new ultra-deepwater rigs and lowering prices.

A more than 50 percent drop in oil prices since June last year has forced producers to cut spending.

In response, Rowan has lowered prices of its rigs and extended contract terms with customers to keep its rigs on the job. It has also deployed four new ultra-deepwater drillships over the past one year.

Rowan said on Wednesday that total available rig days rose nearly 8 percent and average day rates for drillships rose 2.5 percent in the second quarter ended June 30.

The company’s net income jumped to $84.7 million, or 68 cents per share, in the quarter, from $32.8 million, or 26 cents per share, a year earlier.

On an adjusted basis, Rowan earned 70 cents per share, higher than the average analyst estimate of 56 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose 20.3 percent to $508.7 million, slightly above the estimated $507.2 million.

Up to Tuesday’s close, the stock had fallen 11.6 percent this year, while the Dow Jones U.S. Oil and Gas index fell about 15.3 percent.

In related news, Driller Rowan’s quarterly profit more than doubles.

(Reporting by Sneha Banerjee in Bengaluru; Editing by Maju Samuel and Don Sebastian)

This article was from Reuters and was legally licensed through the NewsCred publisher network.

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