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

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Part 3
Ensco's 2Q17 Results Are around the Corner—What to Expect PART 3 OF 5

Ensco’s Revenues Are Expected to Fall 50% Year-over-Year

Analysts’ estimates

Ensco’s estimated $453 million in revenues in 2Q17 represent a 50% fall year-over-year, down from $471 million in 1Q17. This 3.8% estimated fall in revenues is close to the company’s guided 4.0% fall in 2Q17 revenues. 

Ensco&#8217;s Revenues Are Expected to Fall 50% Year-over-Year

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Peers’ revenues

The following are analysts’ 2Q17 revenue estimates for other offshore drillers (OIH):

  • Transocean (RIG) – Analysts estimate 2Q17 revenues to be $712.0 million—down 24.5% YoY.
  • Noble Corporation (NE) – Analysts estimate 2Q17 revenues to be $284.0 million—down 68.0% YoY.
  • Atwood Oceanics (ATW) – Analysts estimate fiscal 3Q17 revenues to be $123.0 million—down 45.8% YoY.
  • Rowan Companies (RDC) – Analysts estimate 2Q17 revenues to be $291.0 million—down 40.7% YoY

Revenue sources

Ensco earns its revenues primarily through its Jack-Up and Floater segments. About 70% of Ensco’s revenues came from the Floater segment, and ~27% of its revenues came from the Jack-Up segment. The remaining ~3% of its revenues came from managing drilling rigs.

Long-term estimates

As we saw in the previous article, Ensco recently won three new contracts. Two of these contracts are expected to commence in 3Q17, which could boost Ensco’s revenues. Analysts expect Ensco to record $467 million in revenues in 3Q17, which would be the first uptick after a fall in revenues for four consecutive quarters.

Ensco’s 2017 revenues are expected to reach ~$1.8 billion, which would be 33.5% lower than its revenues of ~$2.8 billion in 2016. Its revenues are expected to fall to ~$1.7 billion in 2018.

Ensco’s backlog

On March 31, 2017, Ensco had a total contracted backlog of $3.3 billion. After the company’s merger with Atwood Oceanics, the company’s backlog would be $3.7 billion.

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