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Helmerich & Payne Inc HP

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

H&P Posts Large Sequential Top-Line Growth as a Result of U.S. Shale Activity Improvement

Preston Caldwell Equity Analyst

Analyst Note

| Preston Caldwell |

Helmerich & Payne posted 18% sequential revenue in the fourth quarter (the company's fiscal-year first quarter), driven by a 35% gain in the North America solutions segment owing to improvement in industry U.S. shale activity. This was offset by a 56% plunge in the small international segment. Adjusted operating income actually slipped lower, however, to negative $105 million from negative $103 million in the prior quarter. This was because operating income improvement in the North America solutions segment was just $5 million, despite $53 million higher revenue. Our fair value estimate and no-moat rating are unchanged following the results.

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Company Profile

Business Description

Helmerich & Payne has the largest fleet of U.S. land drilling rigs. The company's FlexRig line is the leading choice to drill horizontal wells for production of U.S. tight oil and gas. H&P is present in nearly every major U.S. tight oil and gas basin and also has a small presence internationally.

Contact
1437 South Boulder Avenue, Suite 1400
Tulsa, OK, 74119
T +1 918 742-5531
Sector Energy
Industry Oil & Gas Drilling
Most Recent Earnings Dec 31, 2020
Fiscal Year End Sep 30, 2020
Stock Type Hard Assets
Employees 4,600

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