Helmerich & Payne Earnings: Day Rates Increase as Rig Utilization Exceeds 90% in North America

Helmerich & Payne, or H&P, continued to benefit from a strong North America drilling market, posting revenue growth of 65% year over year and 7% sequentially for the firm’s fiscal second quarter. Operating margins expanded nearly 175 basis points sequentially to 21% as the firm's average rig day rates pushed into the high $30,000s, a trend that is likely to continue over the next several quarters due to a favorable oil environment. We’ll incorporate the firm’s full financial and operating results shortly, but after this first look, we maintain our $49 per share fair value estimate and no-moat rating.