(Dow Jones) Rowan Cos.’s (RDC) fourth-quarter earnings fell 21% as the offshore drilling company reported lower contributions from discontinued operations and higher costs.
Rowan, which operates a fleet of high-specification shallow-water rigs, been transforming itself into a purely offshore driller with the help from proceeds from asset sales. In September, Rowan sold its fleet of land rigs to Ensign Energy Services Inc. (ESI.T, ESVIF) for $510 million. In May, Rowan sold its manufacturing arm LeTourneau Technologies for $1.1 billion to Joy Global Inc. (JOYG).
Rowan reported a profit of $45.1 million, or 36 cents a share, down from $57.3 million, or 45 cents a share, a year earlier. The latest period included 9 cents in income from discontinued operations, while the prior year include contributions of 17 cents. The latest period also included $3.5 million in employee separation related expenses.
Revenue climbed 32% to $275.1 million. Analysts polled by Thomson Reuters most recently projected earnings of 30 cents on revenue of $270 million.
Operating margins weakened to 11% from 24% including the employee-separation-related item.
Day rates increased 5.1% while rig utilization rose to 68% from 65% from a year earlier and 61% in the third quarter.
Average prices for oil were up 10% while average natural gas prices declined 12%.
Shares closed Monday at $35.53 and were inactive premarket. Through Monday’s close, the stock is up 27% this year.
-By Tess Stynes, Dow Jones Newswires