This Is What Fueled Ensco plc's Stock to Rally 12% Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Ensco plc surged as much as 12% in early-afternoon trading on Wednesday. This was after the company announced first-quarter results after the market closed on Tuesday that really pleased the market, as it beat on both the top and bottom lines.

So what: Ensco reported revenue of $1.16 billion, which was not only up 9.4% year over year, but also beat analysts' estimates by $30 million. In addition, the company also beat on the bottom line as it delivered earnings per share of $1.49, which was $0.20 better than Wall Street was expecting. Furthermore, the company also refinanced $1.1 billion in debt during the quarter, giving it no maturities until 2019. Given the rough waters the offshore drilling sector has been navigating, this was welcome news.

That said, the company does still see "challenging market conditions," according to comments made by CEO Carl Trowell in the earnings release. Furthermore, its backlog continues to slip and it is down from $11 billion as of the third quarter of last year to just $8.4 billion, as it's not replacing revenue with new contracts.

Now what: The declining backlog suggests thatEnsco still has a tough road ahead of it. However, it is in a bit stronger position than many of its peers due to its top-notch balance sheet. Furthermore, the company prides itself in its customer satisfaction, and its scores have it rated No. 1 in total customer satisfaction, a title it has held for five straight years. These positives should help the company survive the worst of the downturn, as its strong balance sheet should keep it financially afloat while its strong customer satisfaction means it should have a better chance to retain its customers and potentially add new ones as work becomes available.

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