Rowan Reports Improved Operating Results
For the three months ended March 31, 2006, Rowan Companies, Inc. (RDC-NYSE) generated net income of $59.1 million, or 53¢ per share, compared to $43.4 million, or 40¢ per share, in the same period of 2005. Revenues were $299.8 million in the first quarter of 2006, compared to $222.4 million in the first quarter of 2005.
Current period results included $2.5 million of gains on asset sales and $1.9 million of incremental expense associated with the change in accounting for stock-based compensation. The prior period results included $12.9 million, or 12¢ per share, of after-tax income from discontinued operations.
Rowan's offshore rig utilization was 78% during the first quarter of 2006, down from 98% in the comparable 2005 period, as the Company's four rigs in Saudi Arabia only recently commenced operations. The utilization of Rowan's other available 15 offshore rigs was 99% during the first quarter of 2006. The Company's average offshore day rate was a record $128,600 during the first quarter of 2006, up $24,400, or 23%, from the fourth quarter of 2005 and up $67,400, or 110%, from the first quarter of 2005. Rowan's land rig utilization was 98% during the first quarter of 2006, up from 84% in the comparable 2005 period. The Company's average land rig day rate was $22,200 during the first quarter of 2006, up $1,100, or 5%, from the fourth quarter of 2005 and up $5,900, or 36%, from the first quarter of 2005.
As previously disclosed, Rowan will receive $14.9 million per rig for shipyard time, modifications and mobilization related to its four-rig contract in Saudi Arabia. Such fees are being recognized as revenues over the three-year contract period, which began when the rigs commenced drilling operations earlier this month. Labor and other routine operating costs were expensed as incurred throughout the three-to-four month period each rig was in the shipyard or being mobilized to Saudi Arabia.
Danny McNease, Chairman and Chief Executive Officer, commented, "Our businesses continue to perform at record levels and we expect further improvement in the months ahead. Barring a collapse in oil and natural gas prices, worldwide demand for competitive jack-ups should continue to exceed the supply enabling further increases in day rates and contract length. Our manufacturing division made a significant contribution to our first quarter results and its external backlog, at $442 million, continues to grow."