Helmerich & Payne, Inc. Announces Fiscal Second Quarter Results

Rhea-AI Impact

(Neutral)

Rhea-AI Sentiment

(Neutral)

Insights

Helmerich & Payne, Inc. disclosed a moderate quarter-over-quarter revenue increase from $677 million to $688 million. However, investors should be cautious about the slight decrease in net income, down from $95 million to $85 million. The consistency in revenue per day in the North America Solutions segment, along with a marginal increase in direct margins, suggests a controlled operational environment but demonstrates tight cost management rather than growth. The announcement of capital returns to shareholders, including dividends and share repurchases totaling roughly $46 million, aligns with shareholder-friendly policies. However, the higher dividends could be a pivot to maintain investor interest in a higher interest rate climate, potentially signaling caution about future growth prospects.

The stability in the North America Solutions rig count and direct margins reflects resilience in Helmerich & Payne's operational strategy amidst market volatility, particularly in the natural gas sector. The company's focus on commercial economics, indicated by the use of performance contracts, shows a strategic emphasis on quality and efficiency over expansion. However, the projected rig count for the next quarter suggests only modest growth, implying potential headwinds or cautious management expectations. The expansion into the Middle East with Saudi Aramco contracts could signal diversification and long-term growth opportunities outside the more volatile North American market.

04/24/2024 - 04:15 PM

The Company reported fiscal second quarter net income of $85 million, or $0.84 per diluted share; including select items⁽¹⁾ that had a neutral impact on diluted earnings per share
The North America Solutions ("NAS") segment exited the second quarter of fiscal year 2024 with 152 active rigs with revenue per day averaging approximately $38,200/day, flat on a sequential basis; while direct margins⁽²⁾ per day increased by approximately $500/day to $19,200/day
Quarterly NAS operating income increased $3 million sequentially; while direct margins⁽²⁾ increased by $15 million to approximately $271 million, as revenues increased by $19 million to $613 million and expenses increased by $4 million to $342 million
H&P's NAS segment anticipates exiting the third quarter of fiscal year 2024 between 145-151 active rigs
During the second fiscal quarter, the Company returned approximately $46 million of capital to shareholders as follows: $25 million in base dividends, $17 million in supplemental dividends and $4 million in share repurchases⁽³⁾
On February 28, 2024, the Board of Directors of the Company declared a quarterly base cash dividend of $0.25 per share and a supplemental cash dividend of $0.17 per share; both dividends are payable on May 31, 2024 to stockholders of record at the close of business on May 17, 2024

TULSA, Okla.--(BUSINESS WIRE)-- Helmerich & Payne, Inc. (NYSE: HP) reported net income of $85 million, or $0.84 per diluted share, from operating revenues of $688 million for the quarter ended March 31, 2024, compared to net income of $95 million, or $0.94 per diluted share, from operating revenues of $677 million for the quarter ended December 31, 2023. The net income per diluted share for the second and first quarters of fiscal year 2024 include net $0.00 and net $(0.03) of after-tax gains and losses, respectively, comprised of select items⁽¹⁾. For the second quarter of fiscal year 2024, select items were comprised of:

$0.03 of after-tax gains related to the non-cash fair market value adjustments to our equity investments
$(0.03) of after-tax losses related to research and development expenses associated with an asset acquisition

Net cash provided by operating activities was $144 million for the second quarter of fiscal year 2024 compared to net cash provided by operating activities of $175 million for the first quarter of fiscal year 2024.

President and CEO John Lindsay commented, "Fiscal second quarter results are reflective of the Company's continual focus on commercial economics through value delivery in our North America Solutions segment. The direct margins we have been generating in what has been, and continues to be, a somewhat choppy North America Solutions market are a testament to the value creation we provide for our customers. From our perspective, there has been a pronounced and necessary shift in the industry's historical behavior, that is moving its fiscal foundation toward a more sustainable and investable future. Along those lines, we are extremely pleased with the announcement we made during the quarter regarding expanding our presence in the Middle East, with the finalization of the contractual terms with Saudi Aramco for a seven-rig tender award.

"In the U.S. market, contractual churn is still prevalent and pushed our rig count just below the projected exit rate late in the quarter. This churn has been a product of the volatility created by a weaker natural gas market, some recent E&P consolidations, and a variety of other factors. Some of this natural gas volatility is reminiscent of this time last year; however, we believe the impact on our overall activity will be less this year going forward. That said, we do expect the underlying factors causing the churn in the market currently to persist resulting in what we expect to be a fairly stable outlook for our rig count through the third fiscal quarter. Furthermore, we expect stability and resiliency in our direct margins on a per day basis as well. We will remain focused on direct margins and believe the consistent and reliable drilling outcomes we provide to customers is what ultimately drives our market share.

"Regarding the International Solutions segment, our first rig awarded by Saudi Aramco last August is expected to arrive and commence operations later this summer. For the more recent seven-rig tender award, preparations are ongoing from both a rig and operational perspective with expectations that a majority of these rigs will arrive in Saudi Arabia during the fourth calendar quarter of 2024, and commence operations shortly thereafter. During these preparations we will continue to spend our 2024 budgeted capex towards this project and incur start-up operational expenses, which may disproportionately impact near-term international segment margins. We are looking forward to working with Saudi Aramco and believe we are at the beginning of a longer-term presence in the region. The Company's other international operations in South America and Australia are expected to remain relatively stable over the next quarter, as well as our Offshore Gulf of Mexico operations."

Senior Vice President and CFO Mark Smith also commented, "Returning cash to shareholders remains a capital allocation priority as the Company provided roughly $46 million in shareholder returns under its fiscal 2024 supplemental shareholder return plan during the quarter. There was approximately $4 million worth of shares repurchased during the quarter and $42 million paid to shareholders in the form of base and supplemental dividends, representing over a 4% yield. That said, we are cognizant that the current higher interest rate environment may be masking some of the longer-term attractiveness of our dividend yield and flexibility embedded in our supplemental shareholder return plan.

"Currently, we expect our rig count in the third fiscal quarter to average in the high-140 range, which is lower compared to the 155 rig average realized during the second fiscal quarter. To reiterate, this lower activity is a result of contractual churn and a weaker natural gas environment and as such has not deterred the Company's approach to pricing or the use of performance contracts to better recognize the total value H&P provides to our customers. We believe our commitment to preserving contract economics is reflected in our direct margin guidance for the upcoming quarter."

John Lindsay concluded, “Working closely with our customers and collaborating through the use of performance contracts is really driving improved and more reliable outcomes. Our people, FlexRigs, and technology solutions are key components of this success and will continue to be drivers of that success in the future."

Operating Segment Results for the Second Quarter of Fiscal Year 2024

North America Solutions:

This segment had operating income of $147.1 million compared to operating income of $144.5 million during the previous quarter. The increase in operating income was primarily attributable to a higher direct margin offset by higher depreciation expense associated with walking rig conversions and higher research and development expense, some of which related to a recent asset acquisition. Direct margin⁽²⁾ increased by $15.3 million to $271.4 million sequentially.

International Solutions:

This segment had operating income of $3.6 million compared to an operating income of $5.4 million during the previous quarter. The decrease in operating income was mainly due to modestly lower activity during the quarter. Direct margin⁽²⁾ during the second fiscal quarter was $8.4 million compared to $10.2 million during the previous quarter, and was higher than anticipated due to the financial results from our Argentina operations not being as negatively impacted by the local currency and inflationary environment as anticipated. Current quarter results included a $0.5 million foreign currency loss compared to a $1.8 million foreign currency loss in the previous quarter.

Offshore Gulf of Mexico:

This segment had operating income of $0.1 million compared to operating income of $3.1 million during the previous quarter. Direct margin⁽²⁾ for the quarter was $2.9 million compared to $6.0 million in the previous quarter and was lower than expected due primarily to one rig moving onto full rate later in the quarter than anticipated.

Operational Outlook for the Third Quarter of Fiscal Year 2024

North America Solutions:

We expect North America Solutions direct margins⁽²⁾ to be between $255-$275 million
We expect to exit the quarter between approximately 145-151 contracted rigs

International Solutions:

We expect International Solutions direct margins⁽²⁾ to be between $(2)-$2 million, exclusive of any foreign exchange gains or losses, but inclusive of approximately $10-$12 million of rig preparation and start-up expense related to our Saudi Arabia operations

Offshore Gulf of Mexico:

We expect Offshore Gulf of Mexico direct margins⁽²⁾ to be between $5-$8 million

Other Estimates for Fiscal Year 2024

Gross capital expenditures are now expected to be approximately $500 million;
- ongoing asset sales that include reimbursements for lost and damaged tubulars and sales of other used drilling equipment offset a portion of the gross capital expenditures, and are still expected to total approximately $50 million in fiscal year 2024
Depreciation for fiscal year 2024 is now expected to be approximately $405 million
Research and development expenses for fiscal year 2024 are now expected to be roughly $37 million
General and administrative expenses for fiscal year 2024 are now expected to be approximately $240 million
Cash taxes to be paid in fiscal year 2024 are still expected to be approximately $150-$200 million

Select Items⁽¹⁾ Included in Net Income per Diluted Share

Second quarter of fiscal year 2024 net income of $0.84 per diluted share included a net impact $0.00 per share in after-tax gains and losses comprised of the following:

$0.03 of non-cash after-tax gains related to fair market value adjustments to equity investments
$(0.03) of after-tax losses related to research and development expenses associated with an asset acquisition

First quarter of fiscal year 2024 net income of $0.94 per diluted share included $(0.03) in after-tax losses comprised of the following:

$(0.03) of non-cash after-tax losses related to fair market value adjustments to equity investments

Conference Call

A conference call will be held on Thursday, April 25, 2024 at 11:00 a.m. (ET) with John Lindsay, President and CEO, Mark Smith, Senior Vice President and CFO, and Dave Wilson, Vice President of Investor Relations, to discuss the Company’s second quarter fiscal year 2024 results. Dial-in information for the conference call is (800) 267-6316 for domestic callers or (203) 518-9708 for international callers. The call access code is ‘Helmerich’. You may also listen to the conference call that will be broadcast live over the Internet by logging on to the Company’s website at http://www.helmerichpayne.com and accessing the corresponding link through the investor relations section by clicking on “Investors” and then clicking on “News and Events - Events & Presentations” to find the event and the link to the webcast.

About Helmerich & Payne, Inc.

Founded in 1920, Helmerich & Payne, Inc. (H&P) (NYSE: HP) is committed to delivering industry leading levels of drilling productivity and reliability. H&P operates with the highest level of integrity, safety and innovation to deliver superior results for its customers and returns for shareholders. Through its subsidiaries, the Company designs, fabricates and operates high-performance drilling rigs in conventional and unconventional plays around the world. H&P also develops and implements advanced automation, directional drilling and survey management technologies. At March 31, 2024, H&P's fleet included 233 land rigs in the United States, 22 international land rigs and seven offshore platform rigs. For more information, see H&P online at www.helmerichpayne.com.

Forward-Looking Statements

This release includes “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, and such statements are based on current expectations and assumptions that are subject to risks and uncertainties. All statements other than statements of historical facts included in this release, including, without limitation, statements regarding the registrant’s business strategy, future financial position, operations outlook, future cash flow, future use of generated cash flow, dividend amounts and timing, supplemental shareholder return plans and amounts of any future dividends, future share repurchases, investments, active rig count projections, projected costs and plans, objectives of management for future operations, contract terms, financing and funding, capex spending and budgets, outlook for domestic and international markets, future commodity prices, and future customer activity and relationships are forward-looking statements. For information regarding risks and uncertainties associated with the Company’s business, please refer to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and other disclosures in the Company’s SEC filings, including but not limited to its annual report on Form 10‑K and quarterly reports on Form 10‑Q. As a result of these factors, Helmerich & Payne, Inc.’s actual results may differ materially from those indicated or implied by such forward-looking statements. Investors are cautioned not to put undue reliance on such statements. We undertake no duty to publicly update or revise any forward-looking statements, whether as a result of new information, changes in internal estimates, expectations or otherwise, except as required under applicable securities laws.

Helmerich & Payne uses its Investor Relations website as a channel of distribution for material company information. Such information is routinely posted and accessible on its Investor Relations website at www.helmerichpayne.com. Information on our website is not part of this release.

Note Regarding Trademarks. Helmerich & Payne, Inc. owns or has rights to the use of trademarks, service marks and trade names that it uses in conjunction with the operation of its business. Some of the trademarks that appear in this release or otherwise used by H&P include FlexRig, which may be registered or trademarked in the United States and other jurisdictions.

⁽¹⁾ Select items are considered non-GAAP metrics and are included as a supplemental disclosure as the Company believes identifying and excluding select items is useful in assessing and understanding current operational performance, especially in making comparisons over time involving previous and subsequent periods and/or forecasting future periods results. Select items are excluded as they are deemed to be outside the Company's core business operations. See Non-GAAP Measurements.

⁽²⁾ Direct margin, which is considered a non-GAAP metric, is defined as operating revenues (less reimbursements) less direct operating expenses (less reimbursements) and is included as a supplemental disclosure. We believe it is useful in assessing and understanding our current operational performance, especially in making comparisons over time. See Non-GAAP Measurements for a reconciliation of segment operating income(loss) to direct margin. Expected direct margin for the third quarter of fiscal 2024 is provided on a non-GAAP basis only because certain information necessary to calculate the most comparable GAAP measure is unavailable due to the uncertainty and inherent difficulty of predicting the occurrence and the future financial statement impact of certain items. Therefore, as a result of the uncertainty and variability of the nature and amount of future items and adjustments, which could be significant, we are unable to provide a reconciliation of expected direct margin to the most comparable GAAP measure without unreasonable effort.

⁽³⁾ During the second fiscal quarter of fiscal 2024, H&P repurchased approximately 102 thousand shares for approximately $3.9 million.

HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	Three Months Ended									Six Months Ended
(in thousands, except per share amounts)	March 31,			December 31,			March 31,			March 31,			March 31,
(in thousands, except per share amounts)		2024			2023			2023			2024			2023
OPERATING REVENUES
Drilling services	$	685,131		$	674,565		$	766,682		$	1,359,696		$	1,483,852
Other		2,812			2,582			2,540			5,394			5,007
		687,943			677,147			769,222			1,365,090			1,488,859
OPERATING COSTS AND EXPENSES
Drilling services operating expenses, excluding depreciation and amortization		401,851			403,303			449,110			805,154			877,361
Other operating expenses		1,026			1,137			1,188			2,163			2,314
Depreciation and amortization		104,545			93,991			96,255			198,536			192,910
Research and development		12,942			8,608			8,702			21,550			15,635
Selling, general and administrative		62,037			56,577			52,855			118,614			101,310
Asset impairment charges		—			—			—			—			12,097
Gain on reimbursement of drilling equipment		(7,461	)		(7,494	)		(11,574	)		(14,955	)		(27,298	)
Other (gain) loss on sale of assets		2,431			(2,443	)		(2,519	)		(12	)		(4,898	)
		577,371			553,679			594,017			1,131,050			1,169,431
OPERATING INCOME		110,572			123,468			175,205			234,040			319,428
Other income (expense)
Interest and dividend income		6,567			10,734			5,055			17,301			9,760
Interest expense		(4,261	)		(4,372	)		(4,239	)		(8,633	)		(8,594	)
Gain (loss) on investment securities		3,747			(4,034	)		39,752			(287	)		24,661
Other		400			(543	)		(604	)		(143	)		(546	)
		6,453			1,785			39,964			8,238			25,281
Income before income taxes		117,025			125,253			215,169			242,278			344,709
Income tax expense		32,194			30,080			51,129			62,274			83,524
NET INCOME	$	84,831		$	95,173		$	164,040		$	180,004		$	261,185

Basic earnings per common share	$	0.85		$	0.95		$	1.55		$	1.79		$	2.46

Diluted earnings per common share	$	0.84		$	0.94		$	1.55		$	1.79		$	2.46

Weighted average shares outstanding:
Basic		98,774			99,143			103,968			98,960			104,615
Diluted		99,046			99,628			104,363			99,216			105,003

HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
	March 31,			September 30,
(in thousands except share data and share amounts)		2024			2023
ASSETS
Current Assets:
Cash and cash equivalents	$	193,636		$	257,174
Restricted cash		68,547			59,064
Short-term investments		83,390			93,600
Accounts receivable, net of allowance of $2,769 and $2,688, respectively		431,681			404,188
Inventories of materials and supplies, net		107,210			94,227
Prepaid expenses and other, net		64,316			97,727
Assets held-for-sale		—			645
Total current assets		948,780			1,006,625

Investments		274,446			264,947
Property, plant and equipment, net		2,993,825			2,921,695
Other Noncurrent Assets:
Goodwill		45,653			45,653
Intangible assets, net		57,360			60,575
Operating lease right-of-use asset		59,730			50,400
Other assets, net		45,054			32,061
Total other noncurrent assets		207,797			188,689

Total assets	$	4,424,848		$	4,381,956

LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	158,296		$	130,852
Dividends payable		42,047			25,194
Accrued liabilities		238,494			262,885
Total current liabilities		438,837			418,931

Noncurrent Liabilities:
Long-term debt, net		545,441			545,144
Deferred income taxes		502,088			517,809
Other		135,408			128,129
Total noncurrent liabilities		1,182,937			1,191,082

Shareholders' Equity:
Common stock, $0.10 par value, 160,000,000 shares authorized, 112,222,865 shares issued as of March 31, 2024 and September 30, 2023, and 98,752,018 and 99,426,526 shares outstanding as of March 31, 2024 and September 30, 2023, respectively		11,222			11,222
Preferred stock, no par value, 1,000,000 shares authorized, no shares issued		—			—
Additional paid-in capital		502,586			525,369
Retained earnings		2,786,495			2,707,715
Accumulated other comprehensive loss		(7,713	)		(7,981	)
Treasury stock, at cost, 13,470,847 shares and 12,796,339 shares as of March 31, 2024 and September 30, 2023, respectively		(489,516	)		(464,382	)
Total shareholders’ equity		2,803,074			2,771,943
Total liabilities and shareholders' equity	$	4,424,848		$	4,381,956

HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	Six Months Ended March 31,
(in thousands)		2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	180,004		$	261,185
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		198,536			192,910
Asset impairment charges		—			12,097
Provision for credit loss		90			3,222
Stock-based compensation		16,101			15,704
(Gain) loss on investment securities		287			(24,661	)
Gain on reimbursement of drilling equipment		(14,955	)		(27,298	)
Other gain on sale of assets		(12	)		(4,898	)
Deferred income tax expense (benefit)		(15,933	)		3,165
Other		1,630			1,780
Changes in assets and liabilities		(47,231	)		(106,952	)
Net cash provided by operating activities		318,517			326,254

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(254,711	)		(181,479	)
Purchase of short-term investments		(74,749	)		(64,418	)
Purchase of long-term investments		(8,013	)		(18,771	)
Proceeds from sale of short-term investments		87,122			97,744
Insurance proceeds from involuntary conversion		4,980			—
Proceeds from asset sales		20,898			47,718
Net cash used in investing activities		(224,473	)		(119,206	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid		(84,371	)		(102,941	)
Payments for employee taxes on net settlement of equity awards		(12,176	)		(14,410	)
Share repurchases		(51,302	)		(145,013	)
Other		(250	)		(790	)
Net cash used in financing activities		(148,099	)		(263,154	)
Net increase (decrease) in cash and cash equivalents and restricted cash		(54,055	)		(56,106	)
Cash and cash equivalents and restricted cash, beginning of period		316,238			269,009
Cash and cash equivalents and restricted cash, end of period	$	262,183		$	212,903

HELMERICH & PAYNE, INC.
SEGMENT REPORTING
	Three Months Ended						Six Months Ended
	March 31,		December 31,		March 31,		March 31,		March 31,
(in thousands, except operating statistics)	2024		2023		2023		2024		2023
NORTH AMERICA SOLUTIONS
Operating revenues	$	613,339	$	594,282	$	675,780	$	1,207,621	$	1,302,943
Direct operating expenses		341,938		338,208		379,611		680,146		746,466
Depreciation and amortization		97,573		87,019		89,070		184,592		178,884
Research and development		13,006		8,689		8,738		21,695		15,797
Selling, general and administrative expense		13,692		15,876		16,212		29,568		30,402
Asset impairment charges		—		—		—		—		3,948
Segment operating income	$	147,130	$	144,490	$	182,149	$	291,620	$	327,446
Financial Data and Other Operating Statistics^1:
Direct margin (Non-GAAP)²	$	271,401	$	256,074	$	296,169	$	527,475	$	556,477
Revenue days³		14,123		13,711		16,488		27,834		33,067
Average active rigs⁴		155		149		183		152		182
Number of active rigs at the end of period⁵		152		151		179		152		179
Number of available rigs at the end of period		233		233		233		233		233
Reimbursements of "out-of-pocket" expenses	$	73,584	$	69,728	$	77,442	$	143,312	$	156,601

INTERNATIONAL SOLUTIONS
Operating revenues	$	45,878	$	54,752	$	55,890	$	100,630	$	110,691
Direct operating expenses		37,514		44,519		47,275		82,033		88,252
Depreciation		2,418		2,334		1,652		4,752		3,044
Selling, general and administrative expense		2,377		2,476		3,008		4,853		5,717
Asset impairment charges		—		—		—		—		8,149
Segment operating income	$	3,569	$	5,423	$	3,955	$	8,992	$	5,529
Financial Data and Other Operating Statistics¹:
Direct margin (Non-GAAP)²	$	8,364	$	10,233	$	8,615	$	18,597	$	22,439
Revenue days³		1,038		1,173		1,263		2,211		2,403
Average active rigs⁴		11		13		14		12		13
Number of active rigs at the end of period⁵		11		12		15		11		15
Number of available rigs at the end of period		22		22		22		22		22
Reimbursements of "out-of-pocket" expenses	$	1,964	$	3,384	$	2,789	$	5,348	$	5,645

OFFSHORE GULF OF MEXICO
Operating revenues	$	25,913	$	25,531	$	34,979	$	51,444	$	70,143
Direct operating expenses		23,010		19,579		25,688		42,589		51,379
Depreciation		1,941		2,068		1,904		4,009		3,798
Selling, general and administrative expense		884		832		700		1,716		1,533
Segment operating income	$	78	$	3,052	$	6,687	$	3,130	$	13,433
Financial Data and Other Operating Statistics¹:
Direct margin (Non-GAAP)²	$	2,903	$	5,952	$	9,291	$	8,855	$	18,764
Revenue days³		273		289		360		562		728
Average active rigs⁴		3		3		4		3		4
Number of active rigs at the end of period⁵		3		3		4		3		4
Number of available rigs at the end of period		7		7		7		7		7
Reimbursements of "out-of-pocket" expenses	$	8,857	$	7,827	$	7,994	$	16,684	$	15,183

(1)		These operating metrics and financial data, including average active rigs, are provided to allow investors to analyze the various components of segment financial results in terms of activity, utilization and other key results. Management uses these metrics to analyze historical segment financial results and as the key inputs for forecasting and budgeting segment financial results.
(2)		Direct margin, which is considered a non-GAAP metric, is defined as operating revenues (less reimbursements) less direct operating expenses (less reimbursements) and is included as a supplemental disclosure because we believe it is useful in assessing and understanding our current operational performance, especially in making comparisons over time. See — Non-GAAP Measurements below for a reconciliation of segment operating income (loss) to direct margin.
(3)		Defined as the number of contractual days we recognized revenue for during the period.
(4)		Active rigs generate revenue for the Company; accordingly, 'average active rigs' represents the average number of rigs generating revenue during the applicable time period. This metric is calculated by dividing revenue days by total days in the applicable period (i.e. 91 days for the three months ended March 31, 2024, 92 days for the three months ended December 31, 2023, 90 days for the three months ended March 31, 2023, 183 days for the six months ended March 31, 2024, 182 days for the six months ended March 31, 2023).
(5)		Defined as the number of rigs generating revenue at the applicable end date of the time period.

Segment operating income for all segments is a non-GAAP financial measure of the Company’s performance, as it excludes gain on sale of assets, corporate selling, general and administrative expenses and corporate depreciation. The Company considers segment operating income (loss) to be an important supplemental measure of operating performance for presenting trends in the Company’s core businesses. This measure is used by the Company to facilitate period-to-period comparisons in operating performance of the Company’s reportable segments in the aggregate by eliminating items that affect comparability between periods. The Company believes that segment operating income (loss) is useful to investors because it provides a means to evaluate the operating performance of the segments and the Company on an ongoing basis using criteria that are used by our internal decision makers. Additionally, it highlights operating trends and aids analytical comparisons. However, segment operating income (loss) has limitations and should not be used as an alternative to operating income or loss, a performance measure determined in accordance with GAAP, as it excludes certain costs that may affect the Company’s operating performance in future periods.

Income from discontinued operations was presented as a separate line item on our Unaudited Condensed Consolidated Statements of Operations during the three and six months ended March 31, 2023. To conform with the current fiscal year presentation, we reclassified amounts previously presented in Income from discontinued operations, which were not material, to Other within Other income (expense) on our Unaudited Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2023.

The following table reconciles operating income per the information above to income (loss) from continuing operations before income taxes as reported on the Unaudited Condensed Consolidated Statements of Operations:

	Three Months Ended									Six Months Ended
	March 31,			December 31,			March 31,			March 31,			March 31,
(in thousands)		2024			2023			2023			2024			2023
Operating income (loss)
North America Solutions	$	147,130		$	144,490		$	182,149		$	291,620		$	327,446
International Solutions		3,569			5,423			3,955			8,992			5,529
Offshore Gulf of Mexico		78			3,052			6,687			3,130			13,433
Other		2,785			(67	)		6,823			2,718			11,500
Eliminations		(772	)		334			(2,267	)		(438	)		43
Segment operating income	$	152,790		$	153,232		$	197,347		$	306,022		$	357,951
Gain on reimbursement of drilling equipment		7,461			7,494			11,574			14,955			27,298
Other gain (loss) on sale of assets		(2,431	)		2,443			2,519			12			4,898
Corporate selling, general and administrative costs and corporate depreciation		(47,248	)		(39,701	)		(36,235	)		(86,949	)		(70,719	)
Operating income	$	110,572		$	123,468		$	175,205		$	234,040		$	319,428
Other income (expense):
Interest and dividend income		6,567			10,734			5,055			17,301			9,760
Interest expense		(4,261	)		(4,372	)		(4,239	)		(8,633	)		(8,594	)
Gain (loss) on investment securities		3,747			(4,034	)		39,752			(287	)		24,661
Other		400			(543	)		(604	)		(143	)		(546	)
Total unallocated amounts		6,453			1,785			39,964			8,238			25,281
Income before income taxes	$	117,025		$	125,253		$	215,169		$	242,278		$	344,709

SUPPLEMENTARY STATISTICAL INFORMATION
Unaudited

U.S. LAND RIG COUNTS & MARKETABLE FLEET STATISTICS

	April 24,	March 31,	December 31,	Q2FY24
	2024	2024	2023	Average
U.S. Land Operations
Term Contract Rigs	86	96	89	95
Spot Contract Rigs	64	56	62	60
Total Contracted Rigs	150	152	151	155
Idle or Other Rigs	82	81	82	78
Total Marketable Fleet	232	233	233	233

H&P GLOBAL FLEET UNDER TERM CONTRACT STATISTICS
*Number of Rigs Already Under Long-Term Contracts^()**
(Estimated Quarterly Average — as of 3/31/24)

	Q3	Q4	Q1	Q2	Q3	Q4	Q1
Segment	FY24	FY24	FY25	FY25	FY25	FY25	FY26
U.S. Land Operations	84.9	73.2	47.9	32.9	23.4	21.8	19.2
International Land Operations	8.7	7.5	10.1	12.8	11.7	11.0	10.9
Offshore Operations	—	—	—	—	—	—	—
Total	93.6	80.7	58.0	45.6	35.1	32.8	30.1

(*) All of the above rig contracts have original terms equal to or in excess of six months and include provisions for early termination fees.

NON-GAAP MEASUREMENTS

NON-GAAP RECONCILIATION OF SELECT ITEMS AND ADJUSTED NET INCOME()**

	Three Months Ended March 31, 2024
(in thousands, except per share data)	Pretax			Tax Impact			Net			EPS
Net income (GAAP basis)							$	84,831		$	0.84
(-) Fair market adjustment to equity investments	$	3,777		$	920		$	2,857		$	0.03
(-) Research and development expenses associated with an asset acquisition	$	(3,840	)	$	(995	)	$	(2,845	)	$	(0.03	)
Adjusted net income							$	84,819		$	0.84

	Three Months Ended December 31, 2023
(in thousands, except per share data)	Pretax			Tax Impact			Net			EPS
Net income (GAAP basis)							$	95,173		$	0.94
(-) Fair market adjustment to equity investments	$	(4,102	)	$	(1,005	)	$	(3,097	)	$	(0.03	)
Adjusted net income							$	98,270		$	0.97

^(**)The Company believes identifying and excluding select items is useful in assessing and understanding current operational performance, especially in making comparisons over time involving previous and subsequent periods and/or forecasting future period results. Select items are excluded as they are deemed to be outside of the Company's core business operations.

NON-GAAP RECONCILIATION OF DIRECT MARGIN

Direct margin is considered a non-GAAP metric. We define "direct margin" as operating revenues (less reimbursements) less direct operating expenses (less reimbursements). Direct margin is included as a supplemental disclosure because we believe it is useful in assessing and understanding our current operational performance, especially in making comparisons over time. Direct margin is not a substitute for financial measures prepared in accordance with GAAP and should therefore be considered only as supplemental to such GAAP financial measures.

The following table reconciles direct margin to segment operating income (loss), which we believe is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to direct margin.

	Three Months Ended March 31, 2024
(in thousands)	North America Solutions		International Solutions		Offshore Gulf of Mexico
Segment operating income	$	147,130	$	3,569	$	78
Add back:
Depreciation and amortization		97,573		2,418		1,941
Research and development		13,006		—		—
Selling, general and administrative expense		13,692		2,377		884
Direct margin (Non-GAAP)	$	271,401	$	8,364	$	2,903

	Three Months Ended December 31, 2023
(in thousands)	North America Solutions		International Solutions		Offshore Gulf of Mexico
Segment operating income	$	144,490	$	5,423	$	3,052
Add back:
Depreciation and amortization		87,019		2,334		2,068
Research and development		8,689		—		—
Selling, general and administrative expense		15,876		2,476		832
Direct margin (Non-GAAP)	$	256,074	$	10,233	$	5,952

	Three Months Ended March 31, 2023
(in thousands)	North America Solutions		International Solutions		Offshore Gulf of Mexico
Segment operating income	$	182,149	$	3,955	$	6,687
Add back:
Depreciation and amortization		89,070		1,652		1,904
Research and development		8,738		—		—
Selling, general and administrative expense		16,212		3,008		700
Direct margin (Non-GAAP)	$	296,169	$	8,615	$	9,291

	Six Months Ended March 31, 2024
(in thousands)	North America Solutions		International Solutions		Offshore Gulf of Mexico
Segment operating income (loss)	$	291,620	$	8,992	$	3,130
Add back:
Depreciation and amortization		184,592		4,752		4,009
Research and development		21,695		—		—
Selling, general and administrative expense		29,568		4,853		1,716
Direct margin (Non-GAAP)	$	527,475	$	18,597	$	8,855

	Six Months Ended March 31, 2023
(in thousands)	North America Solutions		International Solutions		Offshore Gulf of Mexico
Segment operating income	$	327,446	$	5,529	$	13,433
Add back:
Depreciation and amortization		178,884		3,044		3,798
Research and development		15,797		—		—
Selling, general and administrative expense		30,402		5,717		1,533
Asset impairment charges		3,948		8,149		—
Direct margin (Non-GAAP)	$	556,477	$	22,439	$	18,764

View source version on businesswire.com: https://www.businesswire.com/news/home/20240424794664/en/

Dave Wilson, Vice President of Investor Relations

investor.relations@hpinc.com

(918) 588‑5190

Source: Helmerich & Payne, Inc.

FAQ

What was Helmerich & Payne, Inc.'s net income for the fiscal second quarter?

Helmerich & Payne, Inc. reported a net income of $85 million for the fiscal second quarter.

What was the revenue per day in the North America Solutions segment?

Revenue per day in the North America Solutions segment averaged approximately $38,200.

How much capital was returned to shareholders during the quarter?

Approximately $46 million was returned to shareholders through dividends and share repurchases.

What dividends did the Company declare for the quarter?

The Company declared a quarterly base cash dividend of $0.25 per share and a supplemental cash dividend of $0.17 per share.

What are the expectations for the third quarter in terms of rig counts?

Expectations for the third quarter include lower rig counts in North America and stability in direct margins.

What expenses are expected for international operations in the upcoming quarter?

Increased operational expenses for international operations, particularly related to Saudi Arabia projects, are anticipated.

What were the key factors affecting the Offshore Gulf of Mexico segment's performance?

The Offshore Gulf of Mexico segment experienced lower direct margins due to operational delays, impacting overall performance.

Helmerich & Payne, Inc. Announces Fiscal Second Quarter Results

Insights

FAQ

What was Helmerich & Payne, Inc.'s net income for the fiscal second quarter?

What was the revenue per day in the North America Solutions segment?

How much capital was returned to shareholders during the quarter?

What dividends did the Company declare for the quarter?

What are the expectations for the third quarter in terms of rig counts?

What expenses are expected for international operations in the upcoming quarter?

What were the key factors affecting the Offshore Gulf of Mexico segment's performance?

NYSE:HP

HP Rankings

HP Latest News

HP Stock Data

Trending News

Helmerich & Payne, Inc. Announces Fiscal Second Quarter Results

Insights

Financial Analyst

Energy Sector Analyst

FAQ

What was Helmerich & Payne, Inc.'s net income for the fiscal second quarter?

What was the revenue per day in the North America Solutions segment?

How much capital was returned to shareholders during the quarter?

What dividends did the Company declare for the quarter?

What are the expectations for the third quarter in terms of rig counts?

What expenses are expected for international operations in the upcoming quarter?

What were the key factors affecting the Offshore Gulf of Mexico segment's performance?

NYSE:HP

HP Rankings

HP Latest News

HP Stock Data