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Deep Sea Driller Diamond Offshore Drilling reported worse than expected fourth quarter earnings before the market Monday. Revenue continues to be impacted as day rates for deep water drilling rigs fall. The world's largest offshore drilling company Transocean $RIG report next week.

Diamond Offshore Rig

 

Drilling in the U.S. is still operating at two speeds right now, shale drilling has been increasing all year, deep water drilling has been sideways after falling off the cliff with oil three years ago and has not recovered with the different breakeven points.

Diamond Offshore Drilling Inc. (NYSE: $DO) Report ed Earnings Before Open Monday

($0.42) Missed Exp ($0.40) EPS and $232.50 Missed $246.90 Revenue Forecast

Earnings

Diamond Offshore Drilling Inc. (DO) on Monday reported a loss of $79.2 million in its fourth quarter. On a per-share basis it had a loss of 58 cents. Losses, adjusted for pretax expenses and restructuring costs, came to 42 cents per share.  The results missed Wall Street expectations of 40 cents per share. Revenue of $232.5 million in missed forecasts of $246.9 million.

Diamond Offshore Drilling Inc NYSE: $DO

Market Reaction Pre-Market $9.99 +0.020 (+0.20%)

Highlights

“We continued to make strong progress with another active contracting quarter resulting in approximately 33 months of additional backlog secured,” said Marc Edwards, President and Chief Executive Officer. “Among the new fixtures is a 15-month contract for the Ocean Valiant and a one-year contract for the Ocean Onyx, which we are upgrading and reactivating for the new work. Additional awards were for the Ocean Apex and Ocean Monarch in Australia.”

As of January 1, 2019, the Company’s total contracted backlog was $2.0 billion, not including $135 million margin commitment from one of the Company’s customers.

Diamond Offshore Drilling  Q3 Earnings Recap 

($0.26) Beat Exp ($0.50) EPS and $286.32 Beat $280.20 Revenue Forecast

Earnings

Diamond Offshore Drilling Inc. (DO) slipped to a loss in the third quarter from a profit last year, due to a decline in the contract drilling revenue as well as higher general and administrative expenses.  The net loss was $51.11 million or $0.37 per share compared to a profit of $10.8 million or $0.08 per share a year ago. Adjusted loss per share was $0.26 compared to the previous year quarter’s earnings of $0.25 per share.

The adjusted results exclude restructuring and separation costs, costs for settlement of a previously pending legal claim, the loss on rig sale and last year’s loss on extinguishment of debt, as well as the related tax effects. Revenue fell 22% to $286.32 million. Diamond offshore was expected to post a quarterly loss of $0.38 per share . Revenues were expected to be $280.20 million.

Diamond Offshore Drilling in Q2 reported an EPS loss of ($0.50), $0.12 worse than estimate of ($0.38). Revenue was $268.9 million versus the consensus estimate of $279.63 million. 

Diamond Offshore Drilling Inc NYSE: $DO

Market Reaction Pre-Market $14.14 ▼ 0.070 (-0.49%)

Highlights

  • Revenue fell 22% to $286.32 million.
  • Contract drilling revenues fell by 21.5%
  • Revenues related to reimbursable expenses dropped by 32.5%.
  • DO entered into a new $950 million revolving credit facility maturing October 2023 and amended its existing credit facility. Combined, this provides $1.275 billion of availability and further enhances its liquidity runway.
  • As of October 1, 2018, the company’s total contracted backlog was $2 billion, not including a $135 million margin commitment from one of its customers.

 

Diamond Offshore Drilling Q2 Earnings Recap

($0.50) Missed ($0.38) EPS and $268.9 billion Missed $279.63 forecast in revenue 

Earnings

Diamond Offshore Drilling Q2 EPS loss of ($0.50), $0.12 worse than estimate of ($0.38). Revenue was $268.9 million versus the consensus estimate of $279.63 million. 

Diamond Offshore Drilling Inc NYSE: $DO

Market Reaction > Pre-market $19.41 USD +0.31 (+1.62%)

Highlights

  • Diamond Offshore Drilling earnings results declined due to lower revenue given the continuing depressed market conditions, which impacted both rig utilization and average daily revenue.
  • Of the 14 rigs listed in service by Diamond Offshore, five were in the U.S. waters of the Gulf of Mexico and had the highest day rates.
  • Asset impairment charges of $12 million and $23 million (after tax and noncontrolling interests) were recognized in the three months ended June 30, 2018 and 2017.

Outlook

Marc Edwards, the president and CEO of DO said future contracts for its rigs are better than expected in terms of rates.

"We believe this contracting activity positions Diamond Offshore for success during the remainder of this prolonged downturn, and beyond," he said in a statement.

 Last year Diamond Offshore made the decision to aggressively scrap or offload it's older rigs.  Impairment charges and related taxes were taken last year. This has put it in a more competitive advantage over it's peers in a very difficult market.  In such a background $DO has been cutting costs and increasing efficiency. Maintenance and time management are crucial at this time. 

 About Diamond Offshore

Diamond Offshore is a leader in offshore drilling, providing contract drilling services to the energy industry around the globe with a total fleet of 24 offshore drilling rigs, consisting of 19 semisubmersibles, four dynamically positioned drillships, and one jack-up.

Source: Diamond Offshore

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