Jefferies Neutral On Hercules OffShore (HERO)

Jefferies & Co. is remaining Neutral on shares of Hercules Offshore HERO after the rig operator reported quarterly earnings. It has a $3 price target on shares. In the report Jefferies & Co. writes, "Given the lack of visibility in the GOM due to permitting delays and weak natural gas fundamentals, we remain neutral on HERO shares. HERO reported 2Q10 results of -$0.17, which was inline with our forecast and above Consensus of -$0.19 as better than expected revenues were offset by a lower tax rate (shield) of 20% vs. our 47%. Although costs are tracking lower than we expected in the domestic offshore segment, we are maintaining our 2010 EPS estimate of $(0.64) due to the utilization impact from permit delays, which effectively offsets the lower costs." Shares of Hercules Offshore are flat this morning, at $2.48.