GlobalSantaFe Corp. Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : GlobalSantaFe Corp.

Public Reply Prvt Reply Mark as Last Read File

Previous 10 PreviousNext

To: Dennis Roth who wrote (9)	8/3/2007 8:06:24 AM
From: Dennis Roth	of 10

In line quarter; outlook remains bright - Goldman Sachs - August 03, 2007 What's changed We lowered our 2007E EPS to $6.86 from $6.97 on slightly lower contract drilling income and lower share repurchase assumptions. We lowered our 2008/2009E EPS to $8.86/$10.40 from $9.16/$11.32 primarily due to lower share repurchase assumptions. Our 2007 EBITDA estimate is down by 1.5% at $2.1 billion and our 2008 EBITDA estimate is essentially unchanged at $2.25 billion. Implications (1) 2Q2007 results were operationally in line with an exceptionally strong quarter from ADTI. ADTI's operating margin increased to 7.8% from 0.6% in 1Q2007. Management expects something closer to 4.5% for the remainder of 2007. (2) Management's outlook for the offshore market echoed those of peers on earlier conference calls. The deepwater market remains strong; and while management expects enough incremental jackup demand through the first half of 2008 to keep the market in balance, there is limited visibility past mid-2008. We agree that the international jackup market is likely to remain under-supplied through early/mid 2008; however, dayrates are likely to soften as newbuild deliveries pick up. Valuation On 2007/2008E EV/DACF, GlobalSantaFe trades at 8.5X/6.5X, 6.4%/2.5% discount to its closest peer Noble. On 2007/2008E EV/EBITDA, Global trades at 7.7X/5.8X, 1.5%/6.3% premium to Noble. We are Not Rated on GlobalSantaFeâ€™s shares. Key risks Risks to our price target include (1) capacity additions could result in a flattening or depression of dayrates, (2) cost inflation due to wage pressures and/or shipyard cost overruns, and (3) a severe correction in commodity prices.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 PreviousNext