H&P, Inc. (NYSE: HP) reported net income of $95 million, or $0.93 per diluted share, from operating revenues of $724 million for the quarter ended June 30, 2023, compared to net income of $164 million, or $1.55 per diluted share, from operating revenues of $769 million for the quarter ended March 31, 2023. The net income per diluted share for the third and second quarters of fiscal 2023 include $(0.16) and $0.29 of after-tax losses and gains, respectively, comprised of select items(1). For the third quarter of fiscal year 2023, select items were comprised of:
- $0.05 of non-cash after-tax gains related to the change in estimates of certain liabilities
- $(0.21) of after-tax losses related to the non-cash change in the fair value of certain contingent liabilities, the sales of rigs and related equipment that were held for sale and the scrapping of excess equipment, and non-cash fair market adjustments to our equity investments
Net cash provided by operating activities was $293 million for the third quarter of fiscal year 2023, which included $37 million in tax payments, compared to net cash provided by operating activities of $141 million for the second quarter of fiscal year 2023, which included $114 million in tax payments.
President and CEO John Lindsay commented, "H&P's financial results for the third fiscal quarter were significant for a few reasons. First, they demonstrate that we are achieving economic returns in the low-to-mid teens which are just above our cost of capital. Second, these financial results were achieved during a period when rig activity was declining primarily due to weak natural gas prices, so our emphasis on contract economics rather than market share drove the Company's financial performance this quarter. Finally, the results reflect a behavioral change that has transpired broadly within the energy industry and is guided by fiscal prudence and capital allocation."
Additional Third-Quarter Highlights
- The Company reported fiscal third-quarter net income of $95 million, or $0.93 per diluted share; including select items(1) of $(0.16) per diluted share.
- Quarterly North America Solutions ("NAS") operating income decreased $13 million sequentially, while direct margins(2) decreased $19 million to approximately $277 million, as revenues decreased by $34 million to $642 million and expenses decreased by $15 million to $365 million.
- The North America Solutions segment exited the third quarter of fiscal year 2023 with 153 active rigs reflecting an increase in revenue per day of approximately $790/day to $37,100/day on a sequential basis, while direct margins(2) per day increased by approximately $410/day to $18,400/day.
- Our North America Solutions segment anticipates exiting the fourth quarter of fiscal year 2023 between 141-147 active rigs.