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Gold/Mining/Energy : Global Santa Fe (GSF) (formerly Global Marine) -- Ignore unavailable to you. Want to Upgrade?

To: JBINWC who wrote (981)	10/22/1998 1:34:00 AM
From: Greg Jenkins	Read Replies (3) \| Respond to of 2282

Well here is what A G Edwards has to say: Recent Development: 10-14-98, Third Qtr Earnings. Global Marine reported third quarter earnings of $0.27 per share versus the prior year's $0.44 per share. Earnings for the quarter beat our estmate of $0.25 cent, but just missed the street's estimate of $0.28. Strengths for the quarter were seen in increases in the average rig dayrate by 22% ($59,300 to $72,100) as two new deepwater rigs entered the fleet during the year. With the addition of the two rigs the deepwater fleet now accounts for about half of operating income. Weakness for the quarter was seen in the turnkey (or driling management) segment of the business with revenues down 40% on reduced well completion of 12 versus 26 for 1997. Global Marine continues to experience soft drilling markets in conjunction with the weak commodity price environment. Revenues for the drilling segment were up 14% for the quarter, while revenue for the drilling management segment were down 40%. Net revenues were down for the quarter by 11%, although up 21% for the six months. Operating income for the quarter was down 24% to $66.6 million, although up 22% for the first half. Contract margins came in at an impressive 61%, while drilling management margins were also a solid 21%. (This compares to average margins for most industries in the 5% to 15% range) As a shallow water driller, the company carries greater exposure to commodity prices than some of our other recommendations, accordingly the company has seen more drastic declines in recent earnings results. We believe that 1999 could prove to be a difficult year for GLM if the current commodity market persists. The company offers compelling valuations long term, although added risk near term due to its focus on the shallow water sector. ------------------------------------------------------------------- Conference call highlights will follow tomorrow. Greg J.