A Closer Look at Ensco’s Q2 Results
Ensco plc recently announced second quarter 2010 earnings of $126.3 million, or $0.89 per share. As expected, the results were negatively impacted by lower utilization for the fleet as well as lower average dayrates. Contract drilling revenues were $406.3 million compared to $449.4 million for the first quarter. Second quarter 2009 contract drilling revenues were $497.3 million. The company ended the quarter with $1.2 billion of cash and tangible book value of $5.4 billion, or approximately $38 per share. The long term debt to capital ratio was 4 percent and total contract backlog was $2.6 billion.
We profiled Ensco in greater detail on June 11 when shares traded at $38.31. The share price has advanced to $41.20 at the close of trading today. Recently, we learned that Greenlight Capital acquired a large position in Ensco during the second quarter. David Einhorn, President of Greenlight Capital, recently explained his rationale for the Ensco position. In this article, we will take a closer look at Ensco’s results with a particular focus on trends in dayrates as well as the company’s increasing commitment to the deepwater segment.
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