HOUSTON, Dec. 22, 2014 /PRNewswire/ -- Tesco
Corporation (NASDAQ: TESO) ("TESCO" or the "Company") today is
providing an updated outlook for the financial results for the
fourth quarter of 2014.
The rapid decline in energy prices has impacted drilling
activity and consequently reduced our customer's planned capital
spending. TESCO has experienced the impact of these developments
during the fourth quarter and that has reduced expectations for
both revenue and earnings this quarter.
These developments have affected the demand for TESCO's capital
equipment as some customers have requested to defer shipment of
several top drives and Casing Drilling Systems (CDS) units from the
fourth quarter of 2014 to 2015. In addition, we have received some
order cancellations that will impact the fourth quarter and 2015.
We now expect to ship approximately 25-27 top drives in the fourth
quarter. We plan to book approximately 15-17 new top drives during
the fourth quarter before cancellations.
We have also experienced tubular service activity declines,
primarily in North America as well
as some temporary activity disruptions in Mexico and Argentina. Russia remains slow as its economic conditions
continue to decline. We believe that customers in other
international markets served by TESCO will base their decisions on
longer term factors and their response to current market conditions
is expected to be more measured.
As a result, we do not expect revenues in the fourth quarter to
improve sequentially and they are now expected to be closer to the
first half run rate. Profitability will also be adversely impacted
in the fourth quarter as revenue declines faster than costs. In
addition, we expect to incur certain non-recurring charges
involving the recent Russian currency devaluation, warranty
reserves and costs associated with executive retirement. These
particular non-recurring charges will impact net earnings by
approximately $0.08 - $0.10 per
diluted share.
As a net result of the events above, the Company currently
expects that its fourth quarter 2014 reported net earnings,
excluding the non-recurring charges, will be in the range of
$0.10 - $0.15 per diluted share.
Fernando Assing, TESCO's Chief
Executive Officer, commented, "We will use this market condition as
an opportunity to lower our cost structure and streamline our
organization. This will lower costs in 2015 and will improve our
leverage when the market recovers. We are well positioned to
deal effectively with the uncertain times and our priority remains
cash generation and preservation until such conditions improve. Our
strong balance sheet provides stability and flexibility and our
technologies, safety and quality will continue to provide the
differentiation required in the market place. Our goal is to
improve TESCO's performance over the long run and the optimizations
required will allow us to be better positioned to achieve
that."
TESCO Corporation is a global leader in the design, manufacture
and service of technology based solutions for the upstream energy
industry. The Company's strategy is to change the way people drill
wells by delivering safer and more efficient solutions that add
real value by reducing the costs of drilling for and producing oil
and natural gas. TESCO® is a registered trademark in
the United States and Canada. Casing Drive System™, CDS™, Multiple
Control Line Running System™ and MCLRS™ are trademarks in
the United States and Canada.
For further information please contact:
Chris
Boone (713) 359-7000
Tesco Corporation
Caution Regarding Forward-Looking Information and Risk
Factors
This news release contains forward-looking statements within
the meaning of Canadian and United
States securities laws, including the United States Private
Securities Litigation Reform Act of 1995. From time to time, our
public filings, press releases and other communications (such as
conference calls and presentations) will contain forward-looking
statements. Forward-looking information is often, but not always
identified by the use of words such as "anticipate", "believe",
"expect", "plan", "intend", "forecast", "target", "project", "may",
"will", "should", "could", "estimate", "predict" or similar words
suggesting future outcomes or language suggesting an outlook.
Forward-looking statements in this press release include, but are
not limited to, statements with respect to expectations of our
prospects, future revenue, earnings, activities and technical
results.
Forward-looking statements and information are based on
current beliefs as well as assumptions made by, and information
currently available to, us concerning anticipated financial
performance, business prospects, strategies and regulatory
developments. Although management considers these assumptions to be
reasonable based on information currently available to it, they may
prove to be incorrect. The forward-looking statements in this news
release are made as of the date it was issued and we do not
undertake any obligation to update publicly or to revise any of the
included forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
applicable law.
By their very nature, forward-looking statements involve
inherent risks and uncertainties, both general and specific, and
risks that outcomes implied by forward-looking statements will not
be achieved. We caution readers not to place undue reliance on
these statements as a number of important factors could cause the
actual results to differ materially from the beliefs, plans,
objectives, expectations and anticipations, estimates and
intentions expressed in such forward-looking statements.
These risks and uncertainties include, but are not limited
to, the impact of changes in oil and natural gas prices and
worldwide and domestic economic conditions on drilling activity and
demand for and pricing of our products and services, other risks
inherent in the drilling services industry (e.g. operational risks,
potential delays or changes in customers' exploration or
development projects or capital expenditures, the uncertainty of
estimates and projections relating to levels of rental activities,
uncertainty of estimates and projections of costs and expenses,
risks in conducting foreign operations, the consolidation of our
customers, and intense competition in our
industry), risks, including litigation, associated with
our intellectual property and with the performance of our
technology. These risks and uncertainties may cause our actual
results, levels of activity, performance or achievements to be
materially different from those expressed or implied by any
forward-looking statements. When relying on our forward-looking
statements to make decisions, investors and others should carefully
consider the foregoing factors and other uncertainties and
potential events.
Copies of our Canadian public filings are available through
www.tescocorp.com and on SEDAR at www.sedar.com. Our U.S. public
filings are available at www.sec.gov and through
www.tescocorp.com.
The risks included here are not exhaustive. Refer to "Part I,
Item 1A - Risk Factors" in our Annual Report on Form 10-K filed for
the year ended December 31, 2013 for
further discussion regarding our exposure to risks. Additionally,
new risk factors emerge from time to time and it is not possible
for us to predict all such factors, nor to assess the impact such
factors might have on our business or the extent to which any
factor or combination of factors may cause actual results to differ
materially from those contained in any forward looking statements.
Given these risks and uncertainties, investors should not place
undue reliance on forward-looking statements as a prediction of
actual results.
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SOURCE Tesco Corporation