NEW YORK (TheStreet) -- Helmerich & Payne (HP - Get Report) shares are down 8.16% to $54.80 in trading on Thursday after the contract oil and gas driller reported its first quarter earnings results before the opening bell today.
Though the company beat analysts first quarter earnings and revenue expectations, its own warning of headwinds in the coming year may be may raise investor concerns.
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The company reported first quarter net income of $1.70 per share, easily topping analysts' $1.55 per share expectations. Revenue for the period rose 19% over the previous year to $1.06 billion, ahead of the $990 million analysts were expecting for the quarter.
However, the company also said that falling crude price would adversely affect its bottom line in the coming year as six-year lows in oil prices impact spot pricing and domestic drilling activity.
The company expects activity to decrease by 25% sequentially in the second quarter while the average rig expense per day is expected to increase to roughly $13,350 in the period.
TheStreet Ratings team rates HELMERICH & PAYNE as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HELMERICH & PAYNE (HP) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- You can view the full analysis from the report here: HP Ratings Report