Rowan Reports First Quarter 2007 Operating Results
For the three months ended March 31, 2007, Rowan Companies, Inc. (NYSE:RDC) generated net income of $86.4 million, or 77 cents per share, compared to $62.4 million, or 56 cents per share, in the fourth quarter of 2006 and $59.1 million, or 53 cents per share, in the first quarter of 2006. Revenues were a record $462.3 million in the first quarter of 2007, compared to $410.9 million in the fourth quarter of 2006 and $299.8 million in the first quarter of 2006.
The first quarter 2007 results included $24.1 million, or 14 cents per share, of gains on asset sales, compared to $2.5 million, or 1 cent per share, in the prior-year period. There were no significant asset sales in the fourth quarter of 2006, though that period included $12.8 million or 10 cents per share of charges related to environmental matters. The first quarter 2007 results also included $11.3 million, or 7 cents per share, of incremental loss recorded on the Company's external rig construction project, bringing the total expected loss on the project to $13.4 million.
Rowan's offshore rig utilization was 84% during the first quarter of 2007, up from 81% in the fourth quarter of 2006 and 78% in the first quarter of 2006. The Company's average offshore day rate was $143,300 during the first quarter of 2007, down by $1,100, or less than 1%, from the fourth quarter of 2006 and up by $15,100, or 12%, from the first quarter of 2006.
Rowan's land rig utilization was 92% during the first quarter of 2007, down from 95% in the fourth quarter of 2006 and 98% in the first quarter of 2006, though the number of rig operating days increased between periods. The Company's average land rig day rate was $23,900 during the first quarter of 2007, up by $1,200, or 5%, from the fourth quarter of 2006 and up by $1,700, or 8%, from the first quarter of 2006.
Danny McNease, Chairman and Chief Executive Officer, commented, "Our redeployment of assets has, for the time being, been concluded and, by this time next week, all of our offshore rigs should again be generating revenues. Demand for jack-ups in the Middle East and many other foreign markets remains strong, and we are continuing to aggressively pursue long-term opportunities abroad.
"While we remain confident in the long-term viability of the Gulf of Mexico jack-up market, we believe the migration of high specification rigs to other areas will continue. We expect to have fewer of our own jack-ups located in the Gulf of Mexico a year from now than we do today.
"Our manufacturing operations contributed record revenues during the first quarter and we continue to believe that even better days are ahead. Our drilling products and systems comprise over 90% of our current backlog and we expect that demand will continue to grow.
"Our first quarter manufacturing margins were adversely impacted by the additional loss recorded on our external rig construction project, which was undoubtedly affected by the significant demands from our drilling division during the accelerated construction of the Hank Boswell, rebuilding of the Rowan-Louisiana and modifications to our Middle East rigs carried out over the past several months."
Rowan Companies, Inc. is a major provider of international and domestic contract drilling services. The Company also owns and operates a manufacturing division that produces equipment for the drilling, mining and timber industries. The Company's stock is traded on the New York Stock Exchange. Common Stock trading symbol: RDC.