What does Superior Energy Services’ management think?
Superior Energy Services’ (SPN) management does not expect its revenues from North America to revive in 4Q16. In 1Q17, however, it expects upstream activities to pick up.
In the 3Q16 conference call, Superior Energy Services CEO (Chief Executive Officer) David D. Dunlap stated: “While we won’t be active in the fourth quarter and revenue will fall off again as a result, we do expect to get back to work in the first quarter of 2017 with new customers.”
SPN’s growth prospect in international markets and the Gulf of Mexico
Superior Energy Services has focused on building market share in Latin America, Middle East, and India. Regarding SPN’s Gulf of Mexico operations, Dunlap stated in the 3Q16 earnings press release: “While US land markets may be beginning to awaken, the Gulf of Mexico and certain international markets continue to lag and declined further during the third quarter.”
Dunlap added: “We will continue to appropriately size our businesses in these geographies but we will also pursue opportunities that will enhance our performance when these markets improve.”
Notably, SPN makes up 0.17% of iShares Core S&P Mid-Cap ETF (IJH). The energy sector makes up 4.1% of IJH.
Outlook for SPN’s peers
FMC Technologies’ (FTI) management expects curtailed activity and restructuring in the Surface Technology segment and lower product sales in the Energy infrastructure segment in 4Q16.
Oil States International’s (OIS) management expects lower operating earnings in 4Q16 due to offshore project delays and uncertainty over drilling and well completion activity. In 4Q16, Halliburton’s (HAL) management expects some weakness to continue in the international energy market until 1H17.
In the next part, we’ll analyze SPN’s value drivers.