Helmerich & Payne Reports Q1 Fiscal 2025 Net Income Decline to $54.8 Million

Helmerich & Payne, Inc. (H&P) reported its financial results for the first quarter of fiscal year 2025, revealing a net income of $54.8 million, or $0.54 per diluted share, a decrease from $95.2 million, or $0.94 per diluted share, in the same period last year. Consolidated operating revenues remained relatively stable at $677.3 million, compared to $677.1 million in the prior year. The company attributed the decline in net income primarily to increased operating expenses, including a notable rise in interest expenses and acquisition transaction costs related to the recent acquisition of KCA Deutag.

In terms of operational performance, H&P's direct operating expenses rose to $413.0 million from $404.4 million year-over-year, driven by start-up costs associated with new operations in Saudi Arabia. Selling, general, and administrative expenses also increased to $63.1 million, reflecting higher labor and IT-related costs. The company recognized approximately $10.5 million in acquisition transaction costs during the quarter, which were primarily related to legal and consulting services for the KCA Deutag acquisition.

H&P's drilling rig fleet consisted of 262 rigs as of December 31, 2024, with 171 active contracted rigs, slightly up from 170 at the end of the previous fiscal year. The North America Solutions segment generated $598.1 million in operating revenues, a marginal increase from $594.3 million, while the International Solutions segment saw a decline in revenues to $47.5 million from $54.8 million, largely due to the absence of revenue-producing activities in Colombia and the UAE. The Offshore Gulf of Mexico segment reported a 14.4% increase in revenues to $29.2 million, attributed to higher pricing levels.

Looking ahead, H&P anticipates that the completion of the KCA Deutag acquisition will significantly enhance its operational capacity, particularly in the International Solutions segment, which is expected to increase its contracted rig count to approximately 89 rigs. The company expects to maintain stable rig activity levels in North America, while also navigating the challenges posed by geopolitical factors affecting its international operations. H&P's contract backlog remains strong at $1.5 billion, with over half expected to be fulfilled in fiscal year 2025, positioning the company favorably for future growth amidst fluctuating market conditions.