Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Helix Energy Solutions Group Inc (NYSE:HLX) stock surged double digits when the market opened this morning. This was after the offshore energy services company reported first quarter earnings that were stronger than expected.
So what: Helix reported revenue of $189.6 million, which was down 25.2% from last year's first quarter and about $9 million less than analysts were expecting. However, earnings were much stronger than expected as the company earned $19.6 million, or $0.19 per share. While that was well off of the $53.7 million, or $0.51 per share, it earned in last year's first quarter earnings did trounce estimates by $0.12 per share and grew from the $0.08 per share Helix earned just last quarter.
In commenting on the quarter CEO Owen Kratz said that, "the company managed to post a respectable first quarter despite poor industry conditions." This was largely due to a big drop in SG&A costs, which fell to 6.7% of revenue. That's down from 11.1% of revenue last quarter, and 8% of revenue in the first quarter of 2013. In addition to that, the company reported that it was awarded a three-year extension for the Q4000 and is seeing continual improvement in the visibility of its Robotics charted vessel fleet.
Now what: Helix clearly responded to the weak oil market by cutting its costs, which had a noticeable impact on its bottom line. Further, the company has a bit more visibility into the future, which has investors breathing a sign of relief. What it needs now is an improvement in oil and gas activity, which will only come as energy prices improve.
Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.