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What: Helix Energy Solutions Group Inc stock surged double digits when the market opened this morning. This was after the offshore energy services company reported first quarter earnings that were stronger than expected.
So what: Helix reported revenue of $189.6 million, which was down 25.2% from last year's first quarter and about $9 million less than analysts were expecting. However, earnings were much stronger than expected as the company earned $19.6 million, or $0.19 per share. While that was well off of the $53.7 million, or $0.51 per share, it earned in last year's first quarter earnings did trounce estimates by $0.12 per share and grew from the $0.08 per share Helix earned just last quarter.
In commenting on the quarter CEO Owen Kratz said that, "the company managed to post a respectable first quarter despite poor industry conditions." This was largely due to a big drop in SG&A costs, which fell to 6.7% of revenue. That's down from 11.1% of revenue last quarter, and 8% of revenue in the first quarter of 2013. In addition to that, the company reported that it was awarded a three-year extension for the Q4000 and is seeing continual improvement in the visibility of its Robotics charted vessel fleet.
Now what: Helix clearly responded to the weak oil market by cutting its costs, which had a noticeable impact on its bottom line. Further, the company has a bit more visibility into the future, which has investors breathing a sign of relief. What it needs now is animprovementin oil and gas activity, which will only come as energy prices improve.
The article This Is What Sent Helix Energy Solutions Group Incs Stock Surging Today originally appeared on Fool.com.
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