March 3, 2010 / 8:20 PM / in 8 years

UPDATE 2-Trinidad Drilling Q4 profit trails estimates

* Q4 EPS C$0.03 vs est C$0.05

* Revenue down 28 pct, beats Street

* Says cautiously optimistic going into 2010 (Adds analyst comments, conference call details; updates share activity)

By Arnika Thakur

BANGALORE, March 3 (Reuters) - Canadian drilling equipment maker Trinidad Drilling Ltd (TDG.TO) posted fourth-quarter earnings that missed estimates, hurt mainly by lower utilization rates and day rates.

Trinidad said it sees some improvement in activity and day rates in the market, but as these are dependent on commodity prices, particularly natural gas prices, it is cautiously optimistic that things will continue to improve as 2010 unfolds.

“If you look at where they stand through their peers, they have a large percentage of their fleet under contract, 50 percent of their fleet under contract, which is pretty good ...,” Canaccord Adams analyst Asad Rawra said by phone.

The company said its expansion to the United States and international markets has reduced its overall exposure to the seasonal factors in its Canadian operations, and its fleet of modern, deep rigs has positioned it better for the unconventional shale plays across North America.

Analyst Rawra said he thinks the company performed better than expected on the U.S. side as the utilization levels were above his expectations.

“Our high contract coverage and newly high-ability fleet has positioned Trinidad Drilling well to compete in this challenging market and excel moving forward,” the company said on a conference call with analysts.

Q4 PROFIT TRAILS

The company reported net income of C$3.9 million, or 3 Canadian cents a share, compared with earnings of C$21.8 million, or 23 Canadian cents a share, last year.

Revenue for the quarter decreased 28 percent to C$148.2 million as utilization levels and dayrates declined.

Analysts on average were expecting earnings of 5 Canadian cents a share on revenue of C$144.8 million, according to Thomson Reuters I/B/E/S.

Shares of the Calgary, Alberta-based company were trading up 9 Canadian cents at C$7.50 Wednesday on the Toronto Stock Exchange. (Reporting by Arnika Thakur and Thyagaraju Adinarayan in Bangalore; Editing by Jarshad Kakkrakandy and Maju Samuel)

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