UPDATE 2-Pride International Q2 profit beats Street
(Recasts; adds details from conference call, analyst comments)
By Chakradhar Adusumilli
BANGALORE, Aug 7 (Reuters) - Oil and gas driller Pride International Inc (PDE.N) beat market estimates with a 29 percent jump in second-quarter profit, helped by higher dayrates for its deepwater rigs as demand grew, sending its shares up as much as 6 percent.
The company, which is looking at options to divest certain of its jackup rigs based in the Gulf of Mexico, also forecast a 25 percent sequential increase in third-quarter profit.
Drilling companies have seen dayrates soar as high energy prices prompt demand for offshore rigs from exploration and production companies.
"Our better-than-expected results were driven largely by the operating performance of our deepwater fleet, which contributed 2 cents to the outperformance," CFO Brian Voegele said on a conference call with analysts.
Analyst Waqar Syed of Tristone Capital said the company's move to find tax-free ways to divest its lower-end rigs in the Gulf of Mexico will help it concentrate more on the deepwater side of its business.
Pride International said a strong Gulf of Mexico jackup market provides a appropriate background to look for opportunities to divest its mat-supported jackup business based in the area.
The company believes its current share price does not properly reflect the true value of its core business and its Gulf of Mexico mat-supported jackup business when valued separately.
A mat-supported jackup rig comes with a mat at the bottom to help stabilize operations in soft and muddy regions.
Shares of the company rose to a high of $42.00, before shedding some of their gains to trade up 59 cents at $39.45 Thursday afternoon on the New York Stock Exchange.
The shares are up more than 9 percent this year, outperforming the broader S&P 1500 Oil & Gas Drilling Sub-Industry Index .15GSPOILD, which has gained almost 2 percent.
Q3 TO EXCEED Q2
The company forecast third-quarter earnings from continuing operations of $1.00 to $1.05 per share, up about 25 percent over second-quarter earnings of 80 cents a share.
Analysts on average expect earnings of $1.05 per share, before special items, for the third quarter.
But Pride International cautioned that it expects inflationary pressures to persist in the third quarter.
The company earned 80 cents a share from continuing operations, excluding a gain related to the sale of its platform rig fleet, during the second quarter. Revenue rose more than 5 percent to $560.3 million.
Analysts on average expected the company to earn 76 cents a share, before special items, on revenue of $557.6 million, according to Reuters Estimates.
Average daily revenue from the company's deepwater rigs rose more than 26 percent to $298,400, while average daily revenue for midwater rigs jumped about 7 percent to $217,800. (Editing by Jarshad Kakkrakandy, Pratish Narayanan)
