Hercules Offshore's first-quarter profit falls 87 percent

HOUSTON—Hercules Offshore Inc., which runs lifeboats and marine drilling rigs, said Thursday its first-quarter profit dropped 87 percent on weaker dayrates and lower utilization rates.

But results beat analyst estimates, and the stock rose 13 cents to close at $26.49.

Net income for the three months ended March 31 fell to $4.5 million, or 5 cents per share, compared with $33.4 million, or $1.03 per share, in the year-earlier period.

In July 2007 Hercules bought drilling contractor Todco in a cash-and-stock deal that included paying 58.8 million shares. That share payment lifted the number of shares outstanding in the recently completed quarter to 89.6 million from 32.5 million.

Analysts polled by Thomson Financial expected, on average, earnings per share of 2 cents.

Revenue rose to $213.4 million from $110.5 million, higher than the $224.3 million analysts expected.

The revenue increase came largely from the international offshore segment, as costs of $22.8 million were well below expectations of $31.9 million, Morgan Keegan & Co. Inc. analyst J. Michael Drickamer wrote in a client note.

Also, the company's newly acquired Todco unit contributed nearly $20 million in revenue.

The company's average revenue per day per rig fell during the quarter to $56,873 from $90,363, and its utilization declined to 54.8 percent from 87.8 percent on weak demand in the U.S. Gulf of Mexico.