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Why Bristow Group Inc's Stock Is Soaring Today

By Matthew DiLallo – Nov 4, 2016 at 9:52AM

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The helicopter service company didn't lose as much money as the market feared.

Image source: Getty Images.

What happened

Bristow Group Inc's (BRS) stock took off on Friday following the release of the company's second-quarter earnings, soaring 18% by 2:45 p.m. EDT.

So what

Propelling Bristow's stock was its fiscal 2017 second-quarter report, which it released Thursday evening. While that report showed an 18% year-over-year decline in revenue, which slumped to $343.7 million and missed analysts' expectations by $14 million, the rest of the numbers were not as bad as feared. For example, its adjusted loss of $12.3 million, or $0.35 per share, beat the consensus estimate by $0.12 per share. Meanwhile, operating cash flow rose 2.6% year over year to $43.4 million.

Overall, the weak oil and gas market continues to be challenging, which is weighing on the company's results. Meanwhile, the post-Brexit sell-off of the British pound shaved $5.6 million, or $0.16 per share off Bristow Group's earnings. Despite all this, the company was able to deliver a quarter that met all its expectations. 

As a result, the company remains on pace to hit its full-year guidance, even after adjusting for the volatility in the currency market. Furthermore, it is starting to see an increase in offshore contract tender activities. That said, Bristow is working to return to profitability even if the oil market does not recover, including taking further actions to diversify away from the oil industry and drive additional improvements in operating efficiencies.

Now what

While Bristow's quarter was not as bad as the market feared, the company continues to face significant headwinds. Because of those headwinds, its stock could remain volatile, especially if oil prices were to take another plunge. Suffice it to say, investors need iron stomachs if they plan to ride out the downturn with Bristow in their portfolios.

Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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