Allis-Chalmers Energy (ALY) Down Over 6% On Investment And Updated Guidance
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Allis-Chalmers Energy (NYSE: ALY) today announced that it has entered into an agreement with BCH Ltd., a Canadian-based drilling company, which Allis-Chalmers expects will accelerate its entry into the Brazilian oilfield services market. Additionally, Allis-Chalmers announced new officer appointments and a reorganization of management responsibilities.
Allis-Chalmers announced today that for the full year 2007 it expects to report revenues of $574 million, operating income of $125 million and net income of approximately $50.3 million, or $1.45 per fully diluted share. For the fourth quarter 2007 it expects to report revenues of approximately $147 million, operating income of $21 million and net income of approximately $5.6 million or $0.16 per fully diluted share. Adjusted EBITDA is expected to be $185.4 million and $38.6 million for the full year and fourth quarter of 2007, respectively. 8.
Operating results in the fourth quarter of 2007 were primarily impacted by:
-- Weakness in demand for drill pipe in the Gulf of Mexico due to the hurricane season and the departure of rigs to the international market.
-- Severe flooding in Villahermosa, the largest operating yard in our Mexican tubular services operation.
Guidance for 2008
Micki Hidayatallah, Allis-Chalmers' Chairman and Chief Executive Officer, stated "While we are disappointed in our current operating results, we believe that we have positioned the company for substantial future growth. We are actively analyzing additional geographical market opportunities to deploy our rental fleet. We believe that our plan to expand our rental fleet footprint will take six to nine months. The Mexican casing and tubing business outlook is excellent, and we have added more advanced handling tools to accommodate the growth in the market. Additionally, the start up expenses associated with our coiled tubing business will no longer penalize operating results, and we are currently experiencing high utilization. We have committed to deliver 18 rigs to Argentina under five year contracts and we expect to have all of the units operating by the third quarter of this year. Pan American has recently announced a major discovery in the Patagonia province, and we expect that discovery to strengthen our operations in Argentina. We continue to be extremely excited about our growth prospects in Central and South America. It is our intention in 2008 to actively pursue international markets and provide additional products and services in these markets."
Allis-Chalmers announced today that for the full year 2007 it expects to report revenues of $574 million, operating income of $125 million and net income of approximately $50.3 million, or $1.45 per fully diluted share. For the fourth quarter 2007 it expects to report revenues of approximately $147 million, operating income of $21 million and net income of approximately $5.6 million or $0.16 per fully diluted share. Adjusted EBITDA is expected to be $185.4 million and $38.6 million for the full year and fourth quarter of 2007, respectively. 8.
Operating results in the fourth quarter of 2007 were primarily impacted by:
-- Weakness in demand for drill pipe in the Gulf of Mexico due to the hurricane season and the departure of rigs to the international market.
-- Severe flooding in Villahermosa, the largest operating yard in our Mexican tubular services operation.
Guidance for 2008
Micki Hidayatallah, Allis-Chalmers' Chairman and Chief Executive Officer, stated "While we are disappointed in our current operating results, we believe that we have positioned the company for substantial future growth. We are actively analyzing additional geographical market opportunities to deploy our rental fleet. We believe that our plan to expand our rental fleet footprint will take six to nine months. The Mexican casing and tubing business outlook is excellent, and we have added more advanced handling tools to accommodate the growth in the market. Additionally, the start up expenses associated with our coiled tubing business will no longer penalize operating results, and we are currently experiencing high utilization. We have committed to deliver 18 rigs to Argentina under five year contracts and we expect to have all of the units operating by the third quarter of this year. Pan American has recently announced a major discovery in the Patagonia province, and we expect that discovery to strengthen our operations in Argentina. We continue to be extremely excited about our growth prospects in Central and South America. It is our intention in 2008 to actively pursue international markets and provide additional products and services in these markets."
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