Rowan Reports Record Quarterly Operating Results



For the three months ended June 30, 2007, Rowan Companies (NYSE:RDC) generated record net income of $128.1 million, or $1.14 per share, compared to $86.4 million, or 77 cents per share, in the first quarter of 2007 and $109.7 million, or 98 cents per share, in the second quarter of 2006. Revenues were a record $507.0 million in the second quarter of 2007, compared to $462.3 million in the first quarter of 2007 and $382.9 million in the second quarter of 2006.

The second quarter 2007 results included $14.6 million, or 8 cents per share, of gains on asset sales, compared to $24.1 million, or 14 cents per share, in the first quarter of 2007 and $24.5 million, or 14 cents per share, in the second quarter of 2006. The second quarter 2007 results also included approximately $4.5 million, or 2 cents per share, of incremental loss recorded on the Company's external rig construction project, which was completed during the period.

Rowan's drilling operations generated record revenues of $353.1 million during the second quarter of 2007, up by $64.8 million, or 22%, from the first quarter of 2007 and by $73.0 million, or 26%, from the second quarter of 2006. The Company's income from drilling operations improved to $181.9 million, or 52% of revenues, during the second quarter of 2007, up by 45% from the first quarter of 2007 and 20% from the second quarter of 2006.

Rowan's offshore rig utilization was 97% during the second quarter of 2007, up from 84% in the first quarter of 2007 and 93% in the second quarter of 2006. The Company's average offshore day rate was $157,100 during the second quarter of 2007, up by $13,800, or 10%, from the first quarter of 2007 and by $13,300, or 9%, from the second quarter of 2006. Rowan's land rig utilization was 97% during the second quarter of 2007, up from 92% in the first quarter of 2007 but down from 100% in the second quarter of 2006, though the number of rig operating days increased between periods. The Company's average land rig day rate was $22,400 during the second quarter of 2007, down by $1,500, or 6%, from the first quarter of 2007 and unchanged from the second quarter of 2006.

Rowan's combined manufacturing operations generated revenues of $153.9 million during the second quarter of 2007, up by $51.1 million or 50% from the second quarter of 2006 and down by $20.1 million, or 12% from the first quarter of 2007. The Company's income from manufacturing operations improved to $13.0 million, or 8% of revenues, during the second quarter of 2007, up by 110% from the first quarter of 2007 and down by 10% from the second quarter of 2006.

Danny McNease, Chairman and Chief Executive Officer, commented, "We are proud of the continuing progress made by our manufacturing businesses in expanding product lines, growing external revenues and improving profitability. Rowan's quarterly manufacturing operating results, for example, now exceed what were annual levels as recently as 2003, and the market acceptance for many of our innovative drilling products keeps growing. Our quote volume suggests that the multi-year growth trend in our drilling products and systems segment will continue.

"Rowan's drilling operations have again contributed record operating results, and our contracted backlog provides significant earnings visibility beyond 2007. We believe that the overall quality of our drilling equipment and personnel, both land and offshore, have helped us to maintain our domestic fleet utilization near optimum levels and minimize the adverse impact on our day rates caused by the current instability in the North American drilling markets. Our efforts to diversify our offshore drilling operations to more lucrative international markets have yielded the dramatic increase in our profitability.

"Demand for high-specification drilling equipment in many foreign markets shows no signs of letting up. Our recent contract extension for the Gorilla V in the North Sea - through June 2009 with a near-50% increase in the day rate - is indicative of the strength of the international market for premium jack-ups. We are continuing to actively pursue growth opportunities for our drilling and manufacturing businesses in several markets abroad, while remaining focused on improving margins in our existing operations."

RELATED COMPANIES