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ENSCO PLC (NYSE:ESV) Receives a Strong Hold Rating From Analysts

ENSCO PLC (NYSE:ESV) is one company that has been posting an outstanding performance, despite being in the highly volatile Oil & Gas industry. While the companies in this industry are just starting recover from the blow of declining oil prices, Ensco is improving upon its EPS. Analysts believe that the company would post an EPS of $0.7 per share for the current quarter and $4.11 for the FY2015.

Ensco has recently been focusing on cost effective operation. The company has decided that it would be adjusting its reporting structure for global operations to just three business units as compared the previous structure of five business units. Furthermore, the company expects to increase $30 million in annual savings, by cutting support positions down by 14%. The recent cuts in expenditures from the company come after the oil & gas industry took a severe blow from declining oil prices. A number of large oil & gas companies have been exercising cost control to maximize their margins per barrel, which is not very favorable to the contractual drilling services.

Ensco had previously announced that it would be reducing $27 million in onshore rightsizing along with a 9% in labor costs. However, under the new business plan, the company would be targeting to save $57 million annually, while saving 15% in labor costs. Although, Ensco is well positioned to improve its revenues from contractual offshore drilling projects, but the company is still exercising cost effectiveness to ensure maximum value for shareholders. In the near-term, Ensco does not have a very high prospect of increasing its revenues, but once the oil & gas companies have made their recovery, Ensco can be well prepared to take advantage of the situation. At the moment, Zack’s rates ESV a strong hold, yet at the same time it places the oil & gas industry at number-3 in the drilling space.

ENSCO PLC (NYSE:ESV) closed at the end of the September 15 session, with the addition of 4.66% to its share value, to reach a share price of $16.41.

Published by Duncan Oleinic

Duncan Oleinic is from New Yourk. After graduating with a degree in physics, he began his career as an analyst in a broking firm. Through this experience he was able to advance to the role of correspondent for a U.S based financial news provider, where he worked from 2001 to 2007. He subsequently joined a merchant banking firm as a financial analyst focused on valuing unlisted companies in the sub-continent. Over the course of his two years here, he performed valuations of several media companies which were later acquired by peers.

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