The effects of high oil prices are finally reflecting on companies' financials. In fact, they are turning out to be a boon for anyone even remotely associated with the oil industry – and contracting services are no exception.
Deep sea contractor Helix Energy Solutions
With exploration and production operations forming a second segment in the company's overall energy strategy, Helix has turned a first-quarter $17.8 million net loss that it posted a year ago into a $25.8 million net profit. Not surprisingly, the bigger chunk of revenue growth came from oil and gas operations, which grew by a whopping 86%, while contracting services showed only a 10.7% corresponding growth.
Operating income stood at $52.1 million -- a huge step forward, compared to the $29.4 million operating loss that the company registered the previous quarter. Compared to five-star CAPS stock Global Industries
A hopeful turnaround
I believe that the contracting services segment will post a bigger turnaround this year once the government starts increasing drilling permits for the Gulf of Mexico. Helix contracts with companies that are into deepwater exploration in the Gulf. With 17% of its consolidated revenues for 2010 coming from BP
The Foolish bottom line
The long-term prospects look good. With a large portion of revenues coming from big oil companies, Helix will definitely look to consolidate its position as a leader in this segment. Other than BP, Shell