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» Superior Energy Services Inc. Q4 2009 Earnings Call Transcript
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» Superior Energy Services Inc. Q2 2009 Earnings Call Transcript
With that, I’ll now turn the call over to David Dunlap.David Dunlap Well, good morning, everyone. Last night, we reported revenues of $424.9 million for the second quarter of 2010. Excluding the management transition expense mentioned in our earnings release, EBITDA was $121 million and our core earnings were $34.6 million or $0.43 per diluted share. If you read the headline of our press release, you know that we’re making progress in expanding into the US land and international markets. I am very pleased with the progress that the company is making and expanding our revenue and earnings from North American land. Our revenue in the second quarter in North American land was $120 million, that’s an increase of 29% sequentially and 61% year-over-year. The increase we experienced was primarily due to utilization gains, especially for coiled tubing and cased-hole wire line. Pricing for our services on land made moderate gains during the course of the quarter. As an indication of where pricing stands, coiled tubing rates are about halfway between the trough of 2009 and the peak of 2008. Our drilling products and services segment also continues to experience geographic expansion into the land market. The company has now established a revenue base in drill pipe, specialty tubulars, accommodations, and stabilization equipment, and revenue from these product lines was 30% of our overall land revenue during the quarter. International revenue was a $113 million, which is a 4% increase sequentially and a 60% increase year-over-year. We continue to make progress in expanding our revenue base in Brazil mainly through rental tool sales. Hallin Marines revenue improved in the second quarter from the first, but results are still below our internal expectations as a result of continued weakness in Asia. Gulf of Mexico revenue was a $192 million, which is an 18% increase sequentially and 11% decrease year-over-year. The sequential increase was due to seasonal factors as demand increased for plug and abandonment, well control, accommodations, coiled tubing, stabilization rentals, and liftboats.
With respect to the oil spill, I continue to be impressed with our product and service lines that have been working tirelessly in support of BP. Our subsidiary wild well control has assisted in developing and engineering many of BP’s containment options as they’ve been on the project since day one.Other Superior assets have joined in the spill response efforts. In addition to engineering services, we’re providing liftboats for logistic support, accommodation units to house spill response workers, and environmental services used in the cleanup efforts. I think the real storyline of the quarter was that our results in the US land market overcame the weakness in Hallin Marine. Work on the oil spill provided the margin of difference over First Call estimates of about $0.38. One significant milestone to note is this marked the first quarter in which we had significantly reduced activity from the wreck removal project and we have effectively replaced it with work in other areas while increasing our profitability. I’d now like to discuss our segment performance in detail. We’ll start with subsidy and well enhancement segment. In the subsidy and well enhancement segment, revenue was $284.4 million and adjusted income from operations was $43.9 million, which represents sequential increases of 22% and 85% respectively. Revenue increase sequentially in all three major geographic regions. Domestic land increased 28% to $84 million, the Gulf of Mexico was up 27% to $129 million, and international increased 9% to $71 million. The product line showing the larger sequential increases were well control, plug and abandonment, coiled tubing, and cased-hole wire line services. Coiled tubing revenue continues to demonstrate one of the strongest growth areas for the company. Revenue from the company’s 33 coiled tubing units on land in the US has increased 87% over the second quarter of 2009 and utilization continues to be strong in most of the US markets. Read the rest of this transcript for free on seekingalpha.com