Diamond Offshore (DO) Beats on Q3 Earnings and Revenues

Diamond Offshore Drilling Inc. DO reported third-quarter 2015 adjusted earnings of $1.01 cents per share that comfortably surpassed the Zacks Consensus Estimate of 61 cents. The bottom line also increased substantially from the year-earlier earnings of 38 cents.

Total revenue in the quarter decreased 17.3% year over year to $609.7 million. However, the top line came in above the Zacks Consensus Estimate of $601.0 million.

Dividend Story

Diamond Offshore declared regular quarterly dividend of 12.5 cents per share (50 cents per share annualized). The dividend will be paid on Dec 1 to shareholders on record as of Nov 13, 2015.

Operational Performance

In the third quarter, revenues from the Contract Drilling segment plunged 17.7% year over year to approximately $599.0 million.

Ultra-Deepwater floaters recorded an average dayrate of $479,000 during the quarter, down from $491,000 in the year-earlier quarter. Deepwater floaters realized an average dayrate of $361,000 compared with $356,000 in the year-ago quarter. Mid-water floaters recorded an average dayrate of $289,000, up from $265,000 in the prior-year quarter. Jackup rig dayrates averaged $97,000, down from $99,000 in the third quarter of 2014.

Rig utilization for Ultra-Deepwater floaters decreased to 71% from 77% in the year-ago quarter. Nonetheless, utilization of Deepwater floaters grew to 59% from 57% a year ago. Mid-water category rig utilization was 31% as against 59% in the comparable quarter last year, while jackup rig utilization decreased significantly to 31% from 83%.

Financials

As of Sep 30, 2015, Diamond Offshore had approximately $141.1 million in cash and cash equivalents, while long-term debt totaled $1,994.7 million.

Zacks Rank

Diamond Offshore currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are Natural Gas Services Group Inc. NGS, Matrix Service Company MTRX and Seadrill Partners L.P SDLP. Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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