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Key Energy – KEG – Customer demand remains strong both in the U.S. and internationally

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Key Energy Services, Inc. (NYSE: KEG) generated first quarter 2012 income from continuing operations of$34.1 million, or$0.23per share, compared to fourth quarter 2011 income from continuing operations of$44.5 million, or$0.30per share, excluding after tax costs of$2.7 million, or$0.02per share, related to the Company’s previously disclosed general and administrative restructuring initiative.

During the first quarter of 2012, Key announced its intention to sell its Argentine operations. As a result, this business has been classified as discontinued operations for the first quarter of 2012, and prior comparable periods have been recast to reflect this change. The carrying value of the Argentine business included$41.5 millionof net assets and$52.4 millionof accumulated foreign currency translation losses, which are included within Key’s consolidated stockholder’s equity. For the first quarter 2012, our Argentine business had a net loss from discontinued operations of$30.9 million, or$0.21per share, on revenue of$25.6 million. Included in the loss for the quarter is a non-cash impairment charge of$26.9 millionafter tax, or$0.18per share, to adjust the carrying value of this business to its current estimated fair value.

For the fourth quarter 2011, our Argentine business had revenue from discontinued operations of$27.5 millionand a net after-tax loss of$2.5 million, or$0.02per share. Fourth quarter results reported herein reflect the specific allocation of income tax attributes between income from continuing operations and losses generated inArgentinaduring 2011, which are reflected in discontinued operations. In our fourth quarter 2011 earnings announcement onFebruary 16, 2012, Key disclosed an after-tax loss fromArgentinaoperations of$5.4 million, or a loss of$0.04per share, based on Key’s consolidated 2011 tax rate.


First quarter 2012 consolidated net income was$3.2 million, or$0.02per share, which includes the aforementioned losses from discontinued operations, compared to fourth quarter 2011 consolidated net income of$39.3 million, or$0.26per share.

Revenue for the first quarter 2012 was$486.8 million, up 1.1% compared to fourth quarter 2011 revenue of$481.7 million.

Overview and Outlook – KEG

Commenting on the results, Key’s Chairman, President and Chief Executive Officer,Dick Alario, stated, “Customer demand remains strong both in the U.S. and internationally. Our U.S. businesses, excluding Coiled Tubing Services, generated just over 3% revenue growth sequentially, as we continue to deploy assets and personnel into high growth regions. Our financial results from Coiled Tubing Services were unsatisfactory in light of strong customer demand. We have made necessary management and operational changes, and we have begun to see improvement.

About Key Energy Services – KEG

Key Energy Services- KEG – is the largest onshore, rig-based well servicing contractor based on the number of rigs owned. Key provides a complete range of well intervention services and has operations in all major onshore oil and gas producing regions of the continentalUnited Statesand internationally inMexico,Colombia, theMiddle EastandRussia.

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.