Highlights

  • H&P expects direct margins in all three segments at or near the high end of fiscal 4Q 2026 guidance ranges.
  • International Solutions direct margins are expected to be around $45 million during the quarter, according to the company.
  • Fiscal third quarter net income was $76 million, or $0.74 per diluted share, including an approximately $115 million gain.
  • The CFO said it remains committed to reaching approximately 1x net debt to adjusted EBITDA by calendar year-end 2027.

Helmerich & Payne (NYSE: HP) shares were trading at USD 39.57 on October 27, 2026, down 0.60%, with a relative volume at time of 2.60. The drilling company issued its fiscal third quarter 2026 earnings release on August 5, 2026, and on October 7, 2026 it published a preliminary financial and operational update for the fourth fiscal quarter ended September 30, 2026, stating that all other guidance items from the August release are unchanged.

Helmerich & Payne is incorporated in Delaware and lists its principal executive offices in Tulsa, Oklahoma. Founded in 1920, the company designs, fabricates and operates high-performance drilling rigs in conventional and unconventional plays around the world. It reports three businesses: North America Solutions, International Solutions and Offshore Solutions. Its fiscal year ends September 30.

Fiscal Fourth Quarter 2026 Update

In its October 7, 2026 news release, the company said it currently expects direct margins for North America Solutions, International Solutions and Offshore Solutions at or near the high end of the previously issued guidance ranges for fiscal 4Q 2026. Direct margin is a non-GAAP metric.

On activity, the company said North America Solutions average rig count is expected near the high end of the range, while International Solutions and Offshore Solutions rig counts are expected near the midpoint.

President and CEO Trey Adams said the company expects International Solutions to report direct margins of around $45 million during the quarter. The release states that the figures are preliminary, remain subject to completion of financial closing procedures and have not been audited, reviewed or compiled by the company's independent registered public accounting firm. Complete results will be included in the annual report on Form 10-K.

Fiscal Third Quarter Results

On the fiscal third quarter call, management reported operating revenues of $1.0 billion, adjusted EBITDA of $236 million and net income of $76 million, or $0.74 per diluted share. Net income included a gain of approximately $115 million related to the sale of the Utica Square real estate asset. Management said excluding that gain and other select items, it recorded a loss of $0.11 per share. Adjusted EBITDA is a non-GAAP measure.

North America Solutions direct margin was $241 million, with an average of 142 contracted rigs. International Solutions direct margin was $31 million, and Offshore Solutions direct margin was $29 million. Management said rigs in Iraq and Bahrain remained suspended during the quarter.

Free cash flow was $98 million.

Balance Sheet and Capital Allocation

Management said the company paid off its term loan of $400 million ahead of schedule and is focused on retiring its $350 million bond due at the end of 2027. It said it plans to maintain its base dividend of around $100 million per year.

In the October 7 release, CFO Todd Scruggs said the company remains committed to reaching approximately 1x net debt to adjusted EBITDA by calendar year-end 2027 while maintaining its base dividend. On the August call, management said it expects to reduce corporate costs by an annualized $40 million by the end of 2027 and is targeting over $160 million from asset sales by the end of fiscal 2027.

Outlook

The October 7 release states that all other financial guidance items in the August 5, 2026 earnings release are unchanged. For fiscal 2027, management said it expects overall direct margins to be higher than in fiscal 2026. In International Solutions, management said it anticipates growth in Latin America to be partially offset by near-term activity reductions in the Middle East.

The guidance given on the August call for the fourth quarter included North America Solutions direct margins of $245 million to $255 million on 145 to 151 rigs, International Solutions direct margins of $25 million to $45 million, and Offshore Solutions direct margins of $26 million to $30 million.