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Diamond Offshore (DO) Reports Loss in Q4, Revenues Beat

Zacks

Diamond Offshore Drilling Inc. DO reported fourth-quarter 2017 adjusted loss of 5 cents per share compared to the Zacks Consensus Estimate of a breakeven. The company reported earnings of 85 cents per share in the year-earlier quarter.

In 2017, the company registered earnings of 82 cents per share, which missed the Zacks Consensus Estimate of 86 cents and declined from $1.77 in the year-ago quarter.

Diamond Offshore Drilling, Inc. Price, Consensus and EPS Surprise

Diamond Offshore Drilling, Inc. Price, Consensus and EPS Surprise | Diamond Offshore Drilling, Inc. Quote


Total revenues of $346.2 million declined from the year-ago figure of $391.9 million but beat the Zacks Consensus Estimate of $344.1 million.

In 2017, total revenues decreased 7.2% year over year to $1,485.7 million. The figure topped the Zacks Consensus Estimate of $1,478.0 million.

The results were affected by lower dayrates and rig utilization from deepwater floaters, mid-water floaters and jackups. It was partially offset by higher utilization of ultra-deepwater floaters and contract extensions for Ocean Valor and Ocean Valiant.

Operational Performance

In the fourth quarter, revenues from the Contract Drilling segment fell 12.2% year over year to approximately $337.8 million but beat the Zacks Consensus Estimate of $326 million.

Ultra-Deepwater floaters recorded an average dayrate of $424,000 during the quarter compared with $456,000 in the year-earlier quarter. Deepwater floaters realized an average dayrate of $175,000 compared with $287,000 in the year-ago quarter. Mid-water floaters recorded an average dayrate of $266,000 compared with $478,000 in the prior-year quarter. Jackups were at an average dayrate of $75,000, unchanged from the preceding quarter.

Rig utilization for Ultra-Deepwater floaters increased to 65% from 49% in the year-ago quarter. Utilization of Deepwater floaters fell to 37% from 39% a year ago. Mid-water category rig utilization was 17% compared with 35% in the year-ago quarter. Jackups category rig utilization was 65% compared with 95% in the preceding quarter.

Financials

As of Dec 31, 2017, Diamond Offshore had approximately $376 million in cash and cash equivalents, while long-term debt totaled $1,972.2 million.

Q4 Price Performance

During the fourth quarter, Diamond Offshore’s shares have outperformed the industry. The company’s shares have gained 28.3% compared with the industry’s 7.2% rally.



Zacks Rank & Key Picks

Diamond Offshore carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are EOG Resources EOG, Pioneer Natural Resources Company PXD and Devon Energy DVN. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Houston, TX-based EOG Resources is a major independent oil and gas exploration and production company. The company delivered an average positive earnings surprise of 40.94% in the preceding four quarters.

Headquartered at Irving, TX, Pioneer Natural Resources Company is an independent oil and gas exploration and production company. The company delivered an average positive earnings surprise of 66.92% in the preceding four quarters.

Devon Energy, based in Oklahoma City, is an independent energy company engaged primarily in the exploration, development and production of oil and natural gas. The company delivered a positive earnings surprise of 13.77% in the preceding quarter.

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