Precision Drilling Corp. (symbol PD on Toronto) provides contract-drilling services to oil and gas producers. Precision owns 355 drilling rigs in Canada, the U.S. and Mexico. Precision recently converted from an income trust to a regular corporation. Investors received one common share for each trust unit they held. The change is in response to Ottawa’s new tax on income-trust distributions, which came into effect on January 1, 2011. In 2010, the resource stock’s revenue rose 19.4%, to $1.4 billion from $1.2 billion in 2009. Higher drilling activity was the main reason for the gain. Precision earned $62.1 million, or $0.22 a share. That’s down 61.6% from $161.7 million, or $0.63 a share, in 2009. However, several one-time items affected the latest earnings: the company recorded a foreign-exchange gain of $13 million in 2010, compared to $123 million for 2009. As well, in 2009, Precision paid $82 million to decommission assets, compared to no charge in 2010. You can get our latest analysis, including our clear buy/sell/hold advice, on Precision and dozens of other companies — including Canadian resource stocks — you may be considering buying in The Successful Investor. What’s more, you can get one month free when you subscribe today. Click here to learn how.
Higher drilling activity pushes up this resource stock’s revenue
Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.