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(Dow Jones) Rowan Cos.’s (RDC) first-quarter earnings rose 54% as higher day rates contributed to the offshore drilling company’s stronger-than-expected revenue growth and improved margins.
Over the past year, Rowan sold its manufacturing and land drilling operations and reinvested the proceeds into its core offshore drilling business, which operates a fleet of high-specification shallow-water rigs. Rowan decided in February to redomicile the company to the U.K., from where its manages its operations in the North Sea and Egypt, which are expected to represent its largest source of revenue this year.
Rowan reported a profit of $49.5 million, or 40 cents a share, up from $32.1 million, or 25 cents, a year earlier. Earnings from continuing operations rose to 45 cents from 21 cents. The most-recent quarter included a charge of 2 cents a share to write down the remaining steel from a jack-up rig construction project canceled in 2009 and transactional costs of the company’s corporate redomestication. Revenue jumped 62% to $333.5 million.
Analysts polled by Thomson Reuters had most recently forecast earnings of 34 cents on revenue of $315 million.
Operating margin rose to 19.4% from 17.4%.
Average day rates increased 15% from a year earlier while rig utilization rose to 75% from 65% a year earlier and 68% in the fourth quarter.
Shares closed Tuesday at $34.53 and were inactive premarket. The stock has fallen 6.1% over the past three months.
–By Melodie Warner, Dow Jones Newswires
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