HP

[dan_s]

Fiscal 2nd quarter results came in above my forecast. - Dan

TULSA, Okla., April 25, 2013 (GLOBE NEWSWIRE) -- Helmerich & Payne, Inc. (HP) reported income from continuing operations of $151,067,000 ($1.39 per diluted share) from operating revenues of $838,309,000 for the second quarter of fiscal 2013, compared to income from continuing operations of $129,763,000 ($1.18 per diluted share) from operating revenues of $769,982,000 during the second fiscal quarter of 2012, and income from continuing operations of $159,611,000 ($1.48 per diluted share) from operating revenues of $844,572,000 during the first fiscal quarter of 2013. Included in income from continuing operations for the second fiscal quarters of 2013 and 2012 are after-tax gains equivalent to $0.03 and $0.05 per diluted share, respectively, related to the sale of used drilling assets. Included in income from continuing operations for the first fiscal quarter of 2013 are after-tax gains equivalent to $0.08 per diluted share related to the sale of used drilling assets and investment securities. Net income for the second quarter of fiscal 2013 was $151,080,000 ($1.39 per diluted share), compared to net income of $129,719,000 ($1.18 per diluted share) during the second fiscal quarter of 2012, and net income of $159,603,000 ($1.48 per diluted share) during the first fiscal quarter of 2013.

Chairman and CEO Hans Helmerich commented, "We are pleased with our solid financial results for the quarter and continue to expect 2013 to improve as the year unfolds. Assuming some measure of oil price resiliency, we anticipate slow activity improvement ahead with customer focus around capturing potential efficiencies, performance reliability and safety providing attractive opportunities for the Company."

[dan_s]

Helmerich & Payne (HP): An updated Net Income & Cash Flow Forecast model has been posted under the Sweet 16 Tab. Our adjusted Fair Value Estimate can be found at the bottom of the model.

Fiscal Q3 should be flat to Q2, then I am expecting income to ramp up. HP Flex Rigs are the best in the business and they remain in very high demand. Flex Rigs are perfect for the pad drilling that goes on in all the major shale plays.

If natural gas prices continue to drift higher it will be very bullish for all of the onshore drillers next year. I doubt we will any increase in gas directed drilling this year as capital budgets are now set for the year. However, if gas approaches $5.00/mmbtu by year-end a lot more capital will go back to drilling in the Haynesville, Barnett and Fayetteville. Plus, the development of the Marcellus is sure to pick up. Regardless, more rigs are going to work in the Permian Basin, Niobrara and the Utica Shale.

[dan_s]

First Call's 12-month price target of $71.43 looks a little low to me. I expect more analysts to increase their price targets in the next couple weeks.