Monday, November 8, 2010

Bronco Drilling (Nasdaq:BRNC) Could Move on Sold Term Contracts Says FBR

FBR Capital said they're maintaining their "Market Perform" rating on Bronco Drilling (Nasdaq:BRNC), citing potential solid term contracts for newbuild rigs.

"Bronco’s land drilling fleet has been more profitable than expected due to strong daily cash margins and rig day rate improvements giving the stock some momentum. We believe the announcement of newbuild rigs with solid term contracts could be a catalyst for BRNC. We estimate the company should have enough cash flow to build three new rigs in 2011 should it be able to obtain term contracts," said FBR.

In a press release on their most recent quarterly performance, Bronco revealed: "Results for the third quarter of 2010 were adversely affected by several non-recurring charges. These charges were related to the divestment of our well service assets, certain mechanical drilling rigs and ancillary drilling equipment, all of our trucking assets and a one-time loss related to Bronco MX. These items resulted in a pre-tax charge of approximately $28.5 million in the third quarter. Without these non-recurring charges, fully diluted earnings per share for the quarter would be a loss of $0.05."

Earnings per share for the quarter came in at a loss of $0.69 after a loss of $18.8 million.

Bronco closed Friday at $5.40, gaining $0.45, or 9.09 percent. FBR has a price target of $5 on them.

No comments:

Post a Comment