|Superior Energy Services, Inc. Reports Second Quarter 2011 Results|
NEW ORLEANS, July 27, 2011 /PRNewswire via COMTEX/ --
Superior Energy Services, Inc. (NYSE: SPN) today announced net income of $48.1 million, or $0.59 per diluted share on record quarterly revenue of $510.8 million for the second quarter of 2011, and adjusted net income of $42.7 million, or $0.53 per diluted share, after excluding a pre-tax gain of $5.9 million from the sale of liftboats and $2.5 million in non-cash, unrealized pre-tax gains from hedging contracts at the Company's equity-method investments.
These results are compared with second quarter of 2010 net income of $24.1 million, or $0.30 per diluted share on quarterly revenue of $424.9 million, and adjusted net income of $34.6 million, or $0.43 per diluted share, after excluding pre-tax management transition expenses of $16.4 million.
For the six months ended June 30, 2011, the Company's net income was $63.6 million, or $0.79 per diluted share on revenue of $924.8 million, and adjusted net income was $57.9 million, or $0.71 per diluted share, after excluding a pre-tax gain of $8.6 million for the sale of liftboats and $0.4 million in non-cash, unrealized pre-tax gains from hedging contracts at the Company's equity-method investments.
For the six months ended June 30, 2010, the Company's net income was $45.6 million, or $0.57 per diluted share on revenue of $789.4 million, and adjusted net income was $56.1 million, or $0.71 per diluted share, after excluding pre-tax management transition expenses of $16.4 million.
David Dunlap, CEO of the Company, commented, "We delivered stronger-than-anticipated earnings and achieved record quarterly revenue due to several factors. The most notable were our continued growth in the highly active U.S. land market for intervention services and rental tools, and increased demand for our subsea inspection, repair and maintenance services in Southeast Asia. In addition, we benefitted from drilling activity in the deepwater Gulf of Mexico - the first notable activity in this market since the second quarter of last year.
"Our operating income as a percentage of revenue (operating margin) nearly doubled as compared with the first quarter of 2011 primarily due to profitability increases in the Subsea and Well Enhancement Segment driven by the growth in demand for well completion tools and services in the Gulf of Mexico and subsea inspection, repair and maintenance services in international markets. In addition, we experienced seasonal increases in demand for shallow water intervention and end-of-life services.
"Our U.S. land revenue increased 11% sequentially as compared with a 6% increase in the average number of drilling rigs working in the U.S. We experienced high utilization levels for our intervention services and high volumes for our drilling products and services. Internationally, our revenue increased 33% and we continued to lay the foundation for future growth by successfully expanding our product and service offering into new geographic markets."
2011 Earnings Guidance Update
The Company expects 2011 adjusted earnings per share - which is exclusive of gains and losses - to be in the range of $1.96 and $2.16. Prior earnings guidance was in the range of $1.62 and $2.02 per diluted share.
Mr. Dunlap commented, "The second quarter was important because we believe it is the launching point for our earnings growth during the remainder of 2011 and into 2012. We expect to be able to grow our earnings base as we put more assets into multiple markets, continue the execution of our international expansion strategy and provide products and services to the gradually improving deepwater Gulf of Mexico drilling market."
For the second quarter of 2011, Gulf of Mexico revenue was approximately $175 million, U.S. land revenue was approximately $198 million, and international revenue was approximately $138 million.
Subsea and Well Enhancement Segment
Second quarter revenue for the Subsea and Well Enhancement Segment was $336.0 million, as compared with $284.4 million in the second quarter of 2010 and $262.0 million in the first quarter of 2011, which represents an 18% year-over-year increase and a 28% sequential increase.
Gulf of Mexico revenue in this segment increased 32% sequentially to $111 million due to a strong surge in demand for completion tools and stimulation services, primarily related to the resumption of deepwater drilling and seasonal activity increases in the shallow water of the Gulf of Mexico. In addition, the segment benefitted from a seasonal uptick in demand for intervention services such as coiled tubing, wire line and snubbing services and end-of-life services such as plug and abandonment. U.S. land revenue in this segment increased 13% sequentially to $131 million due to increased demand for coiled tubing, pressure control products and remedial pumping services. International revenue increased 52% to $94 million due to increased activity for subsea inspection, repair and maintenance services, snubbing services and the successful completion of a two-well subsea plug and abandonment project in Indonesia.
Drilling Products and Services Segment
Second quarter revenue for the Drilling Products and Services Segment was $149.2 million, as compared with $121.3 million in the second quarter of 2010 - a 23% year-over-year improvement - and $128.3 million in the first quarter of 2011, or 16% higher sequentially.
The primary factor driving the higher sequential revenue was a 53% increase in Gulf of Mexico revenue to $39 million as a result of increased demand for premium drill pipe and stabilization equipment. This was due in part to the resumption of drilling rig activity in the deepwater market. U.S. land revenue increased 7% sequentially to $68 million as a result of increased rentals of accommodations, stabilization equipment, and accessories. International revenue increased 7% sequentially to $42 million due to increased rentals of premium drill pipe in Colombia and stabilization equipment in Brazil.
Marine Segment revenue in the second quarter was $25.6 million, a 34% increase over the second quarter of 2010 and an 8% increase from first quarter of 2011. Average fleet utilization in the second quarter of 2011 was 70% as compared with 62% in the second quarter of 2010 and 57% in the first quarter of 2011. The Company sold four liftboats during the second quarter, including two from its 145-155 ft. class fleet, and one each from its 160-175 ft. class fleet and 200 ft. class feet. The Company now has 18 liftboats in its rental fleet.
Conference Call Information
The Company will host a conference call at 10 a.m. Central Time on Thursday, July 28, 2011. The call can be accessed from Superior's website at www.superiorenergy.com, or by telephone at 480-629-9835. For those who cannot listen to the live call, a telephonic replay will be available through Thursday, August 4, 2011 and may be accessed by calling 303-590-3030 and using the pass code 4451411. An archive of the webcast will be available after the call for a period of 60 days at www.superiorenergy.com.
Superior Energy Services, Inc. serves the drilling and production-related needs of oil and gas companies worldwide through its brand name rental tools and its integrated well intervention services and tools, supported by an engineering staff who plan and design solutions for customers. Offshore projects are delivered by the Company's fleet of modern marine assets.
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which involve known and unknown risks, uncertainties and other factors. Among the factors that could cause actual results to differ materially are volatility of the oil and gas industry, including the level of exploration, production and development activity; risks associated with the uncertainty of macroeconomic and business conditions worldwide, as well as the global credit markets; risks associated with the Company's rapid growth; changes in competitive factors and other material factors that are described from time to time in the Company's filings with the Securities and Exchange Commission. Actual events, circumstances, effects and results may be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. Consequently, the forward-looking statements contained herein should not be regarded as representations by Superior or any other person that the projected outcomes can or will be achieved.
FOR FURTHER INFORMATION CONTACT: David Dunlap, CEO; Robert Taylor, CFO; Greg Rosenstein, VP of Investor Relations, (504) 587-7374
SOURCE Superior Energy Services, Inc.