Hercules Offshore Posts 1st-quarter Loss

HOUSTON (AP) — Offshore drilling services company Hercules Offshore Inc. on Tuesday posted a first-quarter loss due to demand and commodity price weakness and higher operating costs amid a struggling energy market.

The company reported a loss of $4.9 million, or 6 cents per share, compared with earnings of $4.5 million, or 5 cents per share, during the same period last year.

Revenue climbed 5.2 percent to $223.5 million from $212.5 million.

Analysts surveyed by Thomson Reuters estimated a loss of 7 cents per share on revenue of $218.4 million, on average.

"Demand for drilling rigs in the U.S. Gulf of Mexico region remains very weak, however, the rate of decline appears to have slowed in recent weeks and activity may be at a near-term bottom," said John Rynd, chief executive of Hercules.

Rynd did not provide a 2009 outlook, but said the company remains cautious as hurricane season nears and as natural gas storage levels remain high and natural gas prices remain weak.

"Yet, we firmly believe that the massive reduction in the U.S. rig count is setting the stage for a very strong recovery in natural gas prices and thus ultimately our customers' capital spending and drilling activity," he added.

Shares of Hercules fell 15 cents, or 5.4 percent, to $2.65 in premarket trading.