Helmerich & Payne ((HP)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Helmerich & Payne’s recent earnings call presented a balanced outlook, highlighting significant achievements in international expansion and debt reduction. However, the company also faced challenges in its international operations and incurred write-off expenses, resulting in a net loss for the fiscal year. This mixed sentiment reflects both optimism for future growth and caution due to current hurdles.
Record-Breaking International Expansion
Helmerich & Payne made significant strides in its international operations, becoming the largest active land driller globally. This was achieved by exporting eight FlexRigs to Saudi Arabia and completing the acquisition of KCAD. This expansion marks a pivotal moment for the company as it strengthens its global footprint.
Strong North America Solutions Performance
The North America Solutions segment has positioned Helmerich & Payne as the leading driller in the U.S. land market. The company increased its market share in the Permian Basin and reported a 5% increase in average lateral lengths, showcasing robust performance in this key segment.
Successful Debt Reduction
The company successfully paid off $210 million on its term loan, significantly ahead of its debt reduction goals. This achievement underscores Helmerich & Payne’s commitment to financial stability and prudent fiscal management.
Financial Resilience
Helmerich & Payne demonstrated financial resilience by generating quarterly revenues of over $1 billion for the third consecutive quarter and achieving an operating cash flow of $207 million in Q4. These figures highlight the company’s ability to maintain strong financial performance amidst challenging conditions.
International Challenges and Reactivation Costs
Despite its international expansion, Helmerich & Payne faced challenges in the Eastern Hemisphere and incurred reactivation costs for seven rigs in Saudi Arabia. These factors impacted international margins, presenting obstacles that the company must navigate moving forward.
Write-off Expenses
The company reported a $10 million write-off related to an investment security and a $40 million write-off of the investment in the same company. These write-offs contributed to the financial challenges faced during the fiscal year.
Net Loss in Fiscal 2025
Helmerich & Payne reported a net loss of $0.58 per diluted share for Q4 and a net loss of $1.66 per share for the full year. This financial result reflects the impact of the challenges and expenses incurred during the fiscal year.
Forward-Looking Guidance
Looking ahead, Helmerich & Payne provided guidance that underscores its strategic positioning for future growth. The North America Solutions segment achieved solid results, and the company anticipates maintaining similar margin levels in the first quarter of fiscal 2026. The International Land segment plans to reactivate seven rigs in Saudi Arabia, increasing the active rig count by mid-2026. Capital expenditures for fiscal 2026 are projected to be between $280 million and $320 million, with a focus on maintenance and reactivation. The company also plans to maintain its base dividend and manage cash taxes effectively.
In summary, Helmerich & Payne’s earnings call reflected a balanced sentiment, highlighting both achievements and challenges. The company’s international expansion and debt reduction efforts are commendable, while international operational challenges and write-off expenses present areas for improvement. Looking forward, Helmerich & Payne is strategically positioned for growth, with plans to maintain strong performance and financial stability.