November 4, 2008 / 2:49 PM / 10 years ago

UPDATE 1-Rowan Q3 profit beats Street, not to spin-off LTI yet

* Q3 EPS of $1.00 beat estimates of $0.87

* Q3 revenue narrowly misses estimates

* Not to spin-off LTI yet owing to tough market conditions

* Shares up nearly 6 percent

Nov 4 (Reuters) - Rowan Companies Inc’s (RDC.N) third-quarter profit beat expectations, helped by a gain on asset sales, and the provider of contract drilling services said it continues to see firm demand in both domestic and foreign markets, sending its shares up nearly 6 percent.

However, the company said it was delaying plans to spin off its manufacturing unit, LeTourneau Technologies Inc (LTI), until the market conditions improved.

“The recent capital markets and commodity price weakness have adversely affected opportunities for monetizing our investment in LTI,” Chief Executive Danny McNease said in a statement.

In March, Rowan had said it would pursue a sale or spin-off LTI and had hired Lehman Brothers and Morgan Stanley as financial advisers.

For the quarter, the company’s net income fell to $114.1 million, down 13 percent from $130.8 million, a year earlier. However, revenue rose 5 percent to $527.1 million.

Third quarter results included a $21.4 million, or 12 cents a share gain on asset sales, the company said.

Offshore rig utilization fell to 95 percent, from 99 percent in the year-ago quarter due to rig relocations or modifications, while average land rig day rates fell 10 percent to $20,900 per day, the company said.

“Continuing weakness in capital markets and commodity prices will, eventually, affect customer demand for our products and services, though we have experienced little impact thus far,” McNease said.

Shares of the Houston-based company were up 74 cents at $19.18 in early trade on the New York Stock Exchange.

For the press release, please double click [ID:nPnLATU031] . For the alerts, please double click [ID:nWNAB7308] . (Reporting by Shradhha Sharma in Bangalore; Editing by Anil D’Silva)

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