Pride International Reports Third Quarter Earnings
|Friday, October 29, 2004
Pride International, Inc. (NYSE: PDE) reported a net loss for the third quarter of 2004 of $18,150,000, or $.13 per share, on revenues of $442,774,000. Reported results include refinancing charges of $30,798,000, damage costs related to Hurricane Ivan of $3,513,000, and executive severance costs of $2,849,000, reducing earnings by $37,160,000 ($27,042,000 net of taxes), or $.20 per share. For the same period in 2003, the Company reported net earnings of $28,712,000, or $.19 per diluted share, on revenues of $450,834,000.
For the nine-month period ended September 30, 2004, the Company reported a net loss of $22,393,000, after tax, or $.17 per share, on revenues of $1,322,697,000. Combined losses from construction projects, refinancing charges, damage costs and severance costs totaled $69,625,000 ($43,526,000 net of taxes), or $.32 per share. Of the pre-tax total, $32,465,000 represented losses from construction projects. For the corresponding nine-month period in 2003, net earnings were $14,519,000, or $.11 per diluted share, on revenues of $1,254,870,000.
Results from the Company's operations for the third quarter of 2004 improved modestly on a sequential basis, excluding construction, refinancing and severance costs. In the U.S. Gulf of Mexico segment, operating results increased due to improving dayrates and utilization.
Profit for the Company's E&P services segment improved substantially over the previous quarter as a result of increased utilization and pricing driven by strong regional demand. Results from the Latin America Land segment were flat with the second quarter of 2004. Rig utilization increased in Argentina and Venezuela during the first quarter 2004 and remained strong throughout the second and third quarters.
Results for the Company's Western Hemisphere segment improved sequentially from the second quarter. Segment profit for the Eastern Hemisphere declined from the previous quarter due to the commencement of a lower dayrate contract for one of the Company's deepwater semisubmersibles in the third quarter of 2004.
The Technical Services segment, which manages construction and engineering projects for customers, recorded a profit for the quarter of approximately $0.7 million. Three of the four platform rigs constructed for third parties are now complete, delivered, and in operating mode, and the final rig has been shipped to the customer's TLP construction site. The Company will continue commissioning of the rig at that location through the middle of the fourth quarter. The Company does not intend to enter into any more lump-sum construction contracts for rigs to be owned by others.
On July 7, 2004, the Company completed a private offering of $500 million principal amount of 7 3/8% Senior Notes due 2014 and entered into new senior secured credit facilities with aggregate availability of up to $800 million, consisting of a $300 million term loan and a $500 million revolving credit facility. The proceeds were used to retire two series of senior notes, two senior secured revolving credit facilities, a senior secured term loan and other indebtedness. In connection with the refinancing, the Company recognized in the third quarter of 2004 refinancing charges of approximately $30.8 million consisting of a tender offer premium, prepayment premiums and the write-off of deferred financing costs related to the retired debt. The refinancing resulted in a significant improvement in available liquidity and financial flexibility, a reduction of interest costs, an extension of debt maturities, and a simplification of the Company's financial structure.
During the quarter, the Company's Rig 1503E suffered damage resulting from Hurricane Ivan. The damage estimate recorded for the rig and other hurricane- related losses is approximately $3.5 million. In addition, the Company incurred executive severance costs of $2.8 million during the third quarter.