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How Did Rowan’s Top Line Perform in 2Q16?

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Aug. 18 2020, Updated 6:36 a.m. ET

2Q16 revenue

Rowan Companies (RDC) has two main operating segments: ultra-deepwater drillships and jack-up drilling rigs. Its total revenue for fiscal 2Q16 was $611 million, which is 22% higher than $500 million in 1Q16 and 20% higher than $508 million in 2Q15.

In 2Q16, almost 55% of the company’s revenue came from the floater segment. The spike in revenue was especially due to revenue from the contract termination of Rowan Relentless.

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Jack-up and floater revenue

Rowan’s jack-up revenue in 2Q16 fell to $264 million, from $272 million in 1Q16. Its jack-up fleet had 108 higher operating days, but the average day rate for the fleet declined to $164,900 from $182,000 in the previous quarter.

Floater revenue increased by $118 million to $339 million in 2Q16, from $221 million in 1Q16.

Future revenues

The contract for Rowan Gorilla will expire in August 2016. The contract on Rowan California will expire in September 2016. These contract terminations will have a negative effect on revenues in the third quarter and after.

Revenue peers

Before Rowan released its 2Q16 earnings, Noble (NE) and Ensco (ESV) released theirs. Noble’s revenues declined 18% from the previous quarter and Ensco’s rose 12%.

Other offshore drilling (IYE) companies are yet to release their 2Q16 results. Below are Wall Street analysts’ expectations:

  • Pacific Drilling (PACD): 2Q16 revenue estimate of $190 million, a fall of 7% from $205 million in 1Q16
  • Transocean (RIG): 2Q16 revenue expected to fall 3% to $907 million in 2Q16 from $1,341 in 1Q16
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