$HP earnings report

This filing is a preliminary fiscal 4Q 2026 operational update rather than a complete earnings release. H&P expects direct margins in North America Solutions, International Solutions and Offshore Solutions to be at or near the high end of its previously issued ranges. The only quantified preliminary segment financial metric is International Solutions direct margin of around $45 million. Direct margin is a non-GAAP measure defined as operating revenues less reimbursements less direct operating expenses less reimbursements.

Activity expectations are constructive but vary by business. North America Solutions average rig count is expected near the high end of its prior range, supporting management’s description of robust activity and continued strong commercial trends. International Solutions average rig count is expected near the midpoint, while Offshore Solutions average rig count and management contracts are also expected near the midpoint. The release does not provide revenue, rig-count, margin-range or segment-profit figures.

Management frames the fiscal 2027 setup around stronger overall direct margins compared with 2026, supported by customer discussions and contracting activity across the global portfolio. North America is expected to sustain robust activity. Within International Solutions, management expects strong Latin America growth, partly offset by near-term Middle East activity reductions. The company also cited the consistency of Offshore Solutions.

Geopolitical exposure is a central operating risk in the update. Management cited ongoing conflict in the Middle East and related operational disruptions, alongside anticipated near-term activity reductions in that region. The company states that all other financial guidance from its August 5, 2026 earnings release is unchanged, but the underlying numerical guidance is not included in this filing.

Capital-allocation commentary centers on preserving the base dividend and reaching approximately 1x net debt to adjusted EBITDA by calendar year-end 2027. No current-period cash flow, cash balance, debt balance, repurchases, dividend amount, revenue, earnings, EPS, or margin figures were provided. H&P emphasizes that the preliminary information is unaudited, subject to financial closing procedures, and does not represent a complete statement of operational results or financial position for the quarter or year ended September 30, 2026.

H&P reported consolidated revenue of $1.035 billion and consolidated adjusted EBITDA of $236 million in the third quarter of fiscal year 2026. GAAP net income attributable to Helmerich & Payne Inc. was $76 million, or $0.74 per share, but included a gain of approximately $115 million related to the sale of Utica Square. Adjusted losses were $(10) million, or $(0.11) per share, making the distinction between reported GAAP earnings and adjusted profitability central to the quarter.

North America Solutions was the principal operating contributor. Operating income was $140 million versus $111 million in the previous quarter, while direct margin rose to $241 million from $215 million. Direct margin averaged $18,669 per day with 142 rigs active, and the company deployed 10 additional rigs in response to demand from private operators. Management attributed activity growth primarily to private and smaller independent operators and said current conditions supported strong utilization and solid margin performance.

International Solutions improved sequentially but remained loss-making. The segment recorded an operating loss of approximately $(54) million, compared with a loss of approximately $(100) million in the prior quarter, which included a $26 million impairment. Direct margin rose to $31 million from $11 million, with 65 average rigs working. Argentina was a key source of momentum, including contracts for five additional rigs, while management also cited ongoing reactivations in Saudi Arabia amid fluid near-term conditions in the Middle East. Offshore Solutions provided a steadier contribution, with operating income of approximately $17 million and direct margin of $29 million, led by performance-related bonuses.

The fourth-quarter outlook calls for North America Solutions direct margin of $245 - $255 and 145 - 151 average rigs, International Solutions direct margin of $25 - $45 and 60 – 70 average rigs, and Offshore Solutions direct margin of $26 - $30 with 30 - 35 average rigs / management contracts. FY'26 gross capital expenditures are guided to $270 - $310, while selling, general and administrative expense is guided to $265 - $285. Management is pursuing efficiency, cost reduction, portfolio simplification, and support-function streamlining initiatives intended to enhance margins, free cash flow generation, and deleveraging.

Capital allocation included approximately $25 million returned to shareholders through the ongoing dividend program. Management stated it remains committed to balancing debt reduction, maintaining its base dividend, and disciplined investment for growth. Investors should focus on whether the guided North America Solutions direct-margin range is achieved, whether International Solutions converts improved direct margin into profitability, the trajectory of Saudi Arabian operations, and execution against the stated cost and deleveraging initiatives.