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Ensco's 2Q17 Results Are around the Corner—What to Expect

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Ensco's 2Q17 Results Are around the Corner—What to Expect PART 1 OF 5

Ensco’s 2Q17 Results Are around the Corner—What to Expect

2Q17 results

Ensco (ESV) plans to release its 2Q17 results on Thursday, July 27, 2017, before the market opens. The company plans to hold its conference call on the same day.

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1Q17 recap

Ensco’s revenues in 1Q17 were down 42% year-over-year (or YoY) and 6.5% quarter-over-quarter. The company’s EBITDA1 fell 50% from 1Q16. 

Ensco believes the recovery in the offshore drilling industry will be challenging, protracted, and phased. The company expects the shallow water jack-up segment to recover first, as this is already well underway. The floater segment has experienced a moderate pickup in activity, but it may not be enough to offset the rigs that are scheduled go off contract during 2017.

Stock performance

On July 10, 2017, Ensco reached a new 52-week low of $4.72. Its stock price has fallen more than 47% since the start of the year. Following are the year-to-date returns of Ensco’s peers:

  • Noble Corporation (NE): fell ~37%
  • Diamond Offshore Drilling (DO): fell ~39%
  • Transocean (RIG): fell ~45%
  • Atwood Oceanics (ATW): fell ~42%
  • Pacific Drilling (PACD): fell ~65%
  • Seadrill (SDRL): fell ~88%
  • Seadrill Partners (SDLP): fell ~23%

The VanEck Vectors Oil Services ETF (OIH), which has 22.3% of its holdings in oil and drilling stocks, has fallen ~26% year-to-date.

Series overview

In the next article, we’ll look at Ensco’s important events that took place recently. Later in the series, we’ll look at analyst estimates and the company’s guidance for Ensco’s revenues and EBITDA for 2Q17. 

A number of analysts have recently revised their recommendations and target prices for Ensco, which we’ll examine in the final part of this series.

  1. earnings before interest, tax, depreciation, and amortization
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