The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Rowan Companies beat expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share contracted significantly.
Gross margins expanded, operating margins increased, net margins contracted.
Rowan Companies tallied revenue of $353.9 million. The 23 analysts polled by S&P Capital IQ foresaw a top line of $341.8 million on the same basis. GAAP reported sales were 51% higher than the prior-year quarter's $234.7 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.39. The 30 earnings estimates compiled by S&P Capital IQ forecast $0.48 per share. GAAP EPS of $0.22 for Q3 were 86% lower than the prior-year quarter's $1.53 per share. (The prior-year quarter included $1.28 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 46.8%, 210 basis points better than the prior-year quarter. Operating margin was 16.6%, 300 basis points better than the prior-year quarter. Net margin was 7.8%, 7,480 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $356.9 million. On the bottom line, the average EPS estimate is $0.67.
Next year's average estimate for revenue is $1.38 billion. The average EPS estimate is $2.08.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 574 members out of 605 rating the stock outperform, and 31 members rating it underperform. Among 155 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 146 give Rowan Companies a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Rowan Companies is outperform, with an average price target of $41.23.
Is Rowan Companies the right energy stock for you? Read about a handful of timely, profit-producing plays on expensive crude in "3 Stocks for $100 Oil." Click here for instant access to this free report.
- Add Rowan Companies to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. 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.
More from The Motley Fool
Is It Time to Buy These Offshore Oil and Gas Drilling Stocks?
Rising crude oil prices and falling offshore development costs could help this struggling industry recover.
Rowan Companies Shares Dropped 25% in January, and That Was Before the Dividend Cut
Continued pressure on oil prices and, by default, rig companies sent shares of Rowan plummeting in January, but a suspension of the dividend actually gave shares a bump.
Offshore Drilling: These Rig Companies Could Be Takeover Candidates
Low oil prices dragged down offshore drillers in general, but these three fundamentally solid companies could be particularly vulnerable to a takeover.