Key Energy Services Generated First Quarter 2012 Earnings from Continuing Operations of $0.23 per Diluted Share
2 days 12 hours 50 minutes ago - PR Newswire via Comtex
Key Energy Services, Inc. (NYSE: KEG) generated first quarter 2012 income from continuing operations of $34.1 million, or $0.23 per share, compared to fourth quarter 2011 income from continuing operations of $44.5 million, or $0.30 per share, excluding after tax costs of $2.7 million, or $0.02 per share, related to the Company's previously disclosed general and administrative restructuring initiative.
During the first quarter of 2012, Key announced its intention to sell its Argentine operations. As a result, this business has been classified as discontinued operations for the first quarter of 2012, and prior comparable periods have been recast to reflect this change. The carrying value of the Argentine business included $41.5 million of net assets and $52.4 million of accumulated foreign currency translation losses, which are included within Key's consolidated stockholder's equity. For the first quarter 2012, our Argentine business had a net loss from discontinued operations of $30.9 million, or $0.21 per share, on revenue of $25.6 million. Included in the loss for the quarter is a non-cash impairment charge of $26.9 million after tax, or $0.18 per share, to adjust the carrying value of this business to its current estimated fair value.
For the fourth quarter 2011, our Argentine business had revenue from discontinued operations of $27.5 million and a net after-tax loss of $2.5 million, or $0.02 per share. Fourth quarter results reported herein reflect the specific allocation of income tax attributes between income from continuing operations and losses generated in Argentina during 2011, which are reflected in discontinued operations. In our fourth quarter 2011 earnings announcement on February 16, 2012, Key disclosed an after-tax loss from Argentina operations of $5.4 million, or a loss of $0.04 per share, based on Key's consolidated 2011 tax rate.
First quarter 2012 consolidated net income was $3.2 million, or $0.02 per share, which includes the aforementioned losses from discontinued operations, compared to fourth quarter 2011 consolidated net income of $39.3 million, or $0.26 per share.
Revenue for the first quarter 2012 was $486.8 million, up 1.1% compared to fourth quarter 2011 revenue of $481.7 million.
The following table sets forth summary data from continuing operations for the first quarter 2012 and prior comparable quarterly periods.
Three Months Ended (unaudited)
March 31, December 31, March 31,
2012 2011 2011
(in millions, except per share amounts)
Revenues $ 486.8 $ 481.7 $ 364.4
Income (loss) attributable to Key $ 34.1 $ 41.8 $ (16.2)
Diluted earnings (loss) per share attributable to Key $ 0.23 $ 0.28 $ (0.12)
Adjusted EBITDA $ 115.4 $ 130.5 $ 69.6
First quarter 2012 U.S. revenue was $425.0 million, up 1.0% compared to $420.9 million in the fourth quarter 2011. Operating income was $91.5 million, or 21.5% of revenue, in the first quarter compared to $106.6 million, or 25.3% of revenue, in the prior quarter.
In addition to the anticipated impact of relocating equipment and personnel into high demand oil markets from declining gas markets, first quarter results were impacted by crew turnover and labor shortages which reduced asset utilization in our Coiled Tubing Services business, formerly Intervention Services, resulting in a sequential 13% revenue decline for that business. Each of Key's other business lines experienced increases in revenue from the prior quarter, notably Rig Services revenue which increased approximately 5% sequentially.
Although first quarter operating income margins were negatively affected by planned asset relocations, the majority of the sequential margin decline is attributed to low coiled tubing asset utilization.