Pioneer Drilling 3rd-Quarter Profit Surges 74 Percent but Misses Wall Street Estimates

Pioneer Drilling Co., which provides drilling services to the oil and gas industry, on Thursday said its fiscal third-quarter profit climbed 74 percent due to a spike in the number of rigs in its fleet, but still fell below Wall Street expectations.

Net income for the quarter ended Dec. 31 jumped to $24 million, or 48 cents per share, from $13.8 million, or 29 cents per share, a year earlier. Quarterly revenue grew 51 percent to $112.4 million from $74.5 million.

Analysts polled by Thomson Financial expected the company to post higher earnings of 50 cents per share on revenue of $112.7 million.

Total operating costs increased 43 percent to $76.2 million, from a year ago.

“While our fleet was highly utilized throughout the quarter, we began feeling the effects of a softening dayrate environment, particularly for low-horsepower rigs working on footage contracts,” said Wm. Stacy Locke, president and chief executive of Pioneer.

Average drilling revenue per day climbed to $20,176 in the quarter, from $15,795 in the same period last year. Additionally, the company’s number of revenue days in the quarter increased to 5,572, up 18.2 percent, from 4,714, a year ago.

Looking ahead, Pioneer expects drilling revenue per day and footage contracts rates to continue to weaken as new rigs come into the marketplace. The company also expects demands for rigs to gradually decline due to a softened market.

Shares of Pioneer Drilling dropped 26 cents to $12.41 in afternoon trading on the American Stock Exchange.

Source: AP via biz.yahoo.com