Seahawk Drilling Hits New High Since Spin-off

NEW YORK (AP) — Seahawk Drilling Inc. hit a new high Thursday, as an analyst raised his 2010 and 2011 earnings estimates for the offshore drilling company, citing its aggressive cost-cutting efforts.

Shares of Seahawk Drilling — which was spun off from Pride International Inc. on Aug. 24 — rose 8 cents to $33.77 in afternoon trading. The stock earlier gained as much as 6 percent to a new high of $35.70. It has ranged between $22.29 and $35.70 since the spin off.

Raymond James analyst J. Marshall Adkins said that despite the drilling company's significant second-quarter loss, recent cost-cutting measures "dramatically reduced cost sequentially," which should benefit the company starting in 2010.

Adkins raised his 2010 estimate to a loss of $3.70 per share, from a loss of $3.80 per share. For 2011, he boosted the company's earnings forecast to 25 cents per share, up from earlier estimates of nil per share.

Adkins cautioned that natural gas remains a wild card element for the company's outlook.

"If natural gas prices crater in the next six weeks, Seahawk could fall as well," he said, as he maintained a "Market Perform" rating. "Moreover, we would like to see the earnings effect of these cost-cutting efforts before getting too excited on the name."