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UPDATE 2-Rowan profit tops Wall St, looks to divestments
February 25, 2011 / 1:28 PM / 7 years ago

UPDATE 2-Rowan profit tops Wall St, looks to divestments

* Q4 EPS ex-items of 42 cts vs Wall St view 29 cts

* Says eyes sales of land rig, manufacturing businesses

* Shares up nearly 7 pct in premarket trading (Adds consensus comparison, CEO comment, share price)

NEW YORK, Feb 25 (Reuters) - Drilling contractor Rowan Cos Inc (RDC.N) reported better-than-expected quarterly profit on Friday and said it was moving ahead with plans to sell or spin off both its land rig and its manufacturing businesses.

“We believe favorable conditions now exist and expect to begin a process soon to either spin off or sell our manufacturing operations,” Chief Executive Officer Matt Ralls said in a release.

“Likewise, the land rig market in the US has been strengthening, particularly for more capable land rigs like those that characterize the Rowan fleet, and we expect to begin a process to monetize this business in the near future as well.”

Analysts have said Rowan could be a takeover target or acquirer when its streamlining is complete. [ID:nWNAB0825] With 30 jackup rigs, Rowan will rank sixth in fleet size once the Ensco Plc (ESV.N) acquisition of Pride PDE.N is final.

Rowan also may want to seek deepwater exposure as business in that market starts picking up with increased drilling off Brazil. [ID:nN24277283]

The company’s fourth-quarter profit fell to $57.3 million, or 45 cents per share, from $60.8 million, or 53 cents per share, a year before.

Excluding one-time items, earnings per share of 42 cents easily topped the 29 cents per share that analysts had forecast, according to Thomson Reuters I/B/E/S.

Revenue rose 15 percent to $458.8 million, .

Rowan’s manufacturing operations contributed $199.2 million to that quarterly revenue, excluding $57.5 million of sales inside the company.

Its shares climbed nearly 7 percent to $42.55 in premarket trading.

Reporting by Matt Daily, additional reporting by Braden Reddall in San Francisco, editing by Dave Zimmerman

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