I welcome all feedback on this. I have been debating all day with people on Stocktwits on this same topic.
HLX surges based on the fact that they met Earnings Estimates. the article announcing this is here:
Motley Fool Article:
I agree beating estimates is a good thing, but what if those estimates don't paint a picture of a company n serious trouble? What I don't get is people jumping on this, when the 10Q paints a horrid position for a company with shrinking profit and revenue.
The whole 10Q is here for your review; http://biz.yahoo.com/e/151021/hlx10-q.html
My point: A company can meet earnings estimates, but if those estimates are low, what does that matter if they are losing money, see a challenging environment ahead, and reduced costs by cutting admin and sales costs?
you make your own opinion, and I would love to hear them. I just don't see how a company like this goes from 5.19 to 7.77 in 1 day on an earning release.
I am happily short as posted on my Profitly profile. I lost a bit in an earlier Short trade and then re-entered Short again.
Here are the notes from the release:
We expect these challenging industry conditions to continue into 2016 and beyond if oil and gas prices fail to increase. Increased competition for limited offshore oil and gas capital projects has driven down rates that drilling rig contractors are charging for their services, which affects all offshore oil and gas services contractors, including us, and is also expected to affect utilization of our assets, and increasingly for 2016, our robotics assets. In addition, the current dynamic and uncertain macroeconomic conditions in some countries around the world, such as Brazil, may have direct and/or indirect impact on existing contracts and contracting opportunities. On the positive side, many oil and gas companies are increasingly focusing on optimizing production of their existing subsea wells. We believe that we have a competitive advantage in terms of performing well intervention services efficiently. Furthermore, we believe that when oil and gas companies begin to increase overall spending levels, it
Here are a few snapshots - but most if it is very negative
- Revenue decreased by $158 Million versus same period
- Gross Margin dropped from 37% to 18%
Comparison of Three Months Ended September 30, 2015 and 2014 The following table details various financial and operational highlights for the periods presented (dollars in thousands): Three Months Ended September 30, Increase/ 2015 2014 (Decrease) Net revenues - Well Intervention $ 94,895 $ 205,139 $ (110,244 ) Robotics 83,310 131,707 (48,397 ) Production Facilities 19,133 24,184 (5,051 ) Intercompany elimination (14,876 ) (20,193 ) 5,317 $ 182,462 $ 340,837 $ (158,375 ) Gross profit - Well Intervention $ 8,967 $ 84,166 $ (75,199 ) Robotics 17,071 31,457 (14,386 ) Production Facilities 7,125 11,422 (4,297 ) Corporate and other (1,031 ) (901 ) (130 ) Intercompany elimination (163 ) 103 (266 ) $ 31,969 $ 126,247 $ (94,278 ) Gross margin - Well Intervention 9% 41% Robotics 20% 24% Production Facilities 37% 47% Total company 18% 37% Number of vessels or ROV assets (1) / Utilization (2) Well Intervention vessels 5/60% 5/97% ROVs 60/59% 61/81% Robotics vessels 5/87% 6/90%
Posted Oct 21, 15 4:31 PM
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