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
Isac Simon does not own shares of any of the companies mentioned in this article. Try any of our Foolish newsletter services free for 30 days. 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.