Diamond Offshore (DO) Earnings Beat, Revenues Miss in Q2

Diamond Offshore Drilling Inc. DO incurred an adjusted loss of 33 cents per share in second-quarter 2018, narrower than the Zacks Consensus Estimate of a loss of 41 cents. The company had reported adjusted earnings of 45 cents in the year-ago quarter.

Total revenues came in at $269 million, which missed the Zacks Consensus Estimate of $283 million. The top line also declined from the year-ago quarter figure of $399 million.

The quarterly results were hurt by lower revenues from the Contract Drilling segment as well as lesser floater dayrates. These were partially offset by higher floater utilization.

Operational Performance

As per the annual report, Diamond Offshore has put up Ocean Scepter for sale and not included the jack-up in its fleet.

In the second quarter, revenues from the Contract Drilling segment plunged 32.3% year over year to approximately $265.4 million.

Floaters recorded an average dayrate of $317,000 compared with $391,000 in the year-earlier quarter. Rig utilization for floaters increased to 53% from 47% in the prior-year quarter.

Financials

As of Jun 30, 2018, Diamond Offshore had approximately $144.2 million in cash and cash equivalents while long-term debt totaled $1,973.1 million.

Q2 Price Performance

During the April-to-June period, Diamond Offshore’s shares surged 42.3% compared with the industry’s 19.3% rise.

Zacks Rank & Key Picks

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

A few better-ranked players in the same sector are Canadian Natural Resources Limited CNQ, China Petroleum and Chemical Corporation SNP, also known as Sinopec, and Sunrun Inc RUN. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Canadian Natural Resources, based in Calgary, Alberta, is an exploration and production (E&P) company. It pulled off an average positive earnings surprise of 4.7% in the last four quarters.

Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company delivered an average positive earnings surprise of 492.8% in the trailing four quarters.

Sunrun is engaged in offering solar services through various channels. The company delivered an average positive earnings surprise of 16.3% in the last four quarters.

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