Diamond Offshore Drilling Earnings: Beats Profit Estimate, Yet Weaker Revenue Drives a Profit Decline

S&P 500 (NYSE:SPY) component Diamond Offshore Drilling Inc. (NYSE:DO) posted a decrease in profit as revenue declined. Diamond Offshore Drilling offers a range of services worldwide in various oil and gas drilling markets, including the deep water, harsh environment, conventional semisubmersible, and jack-up markets.

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Diamond Offshore Drilling Earnings Cheat Sheet for the Third Quarter

Results: Net income for the oil and gas drilling fell to $178 million ($1.28 per share) vs. $256.9 million ($1.85 per share) a year earlier. This is a decline of 30.7% from the year-earlier quarter.

Revenue: Fell 17% to $729 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Diamond Offshore Drilling Inc. beat the mean analyst estimate of $1 per share. Analysts were expecting revenue of $735 million.

Quoting Management: “We posted excellent operating results for the quarter and announced several new contracts at strong dayrates across all ranges of water depths,” said Larry Dickerson, President and Chief Executive Officer of Diamond Offshore. “Our results for the quarter benefited from lower than anticipated operating expense, primarily owing to our continued emphasis on controlling costs.”

Key Stats:

The company has now seen net income fall for four straight quarters. In the second quarter, net income fell 24.4% while the figure fell 26.1% in the first quarter and 22% in the fourth quarter of the last fiscal year.

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 19 cents in the second quarter, by 24 cents in the first quarter, and by 37 cents in the fourth quarter of the last fiscal year.

For four consecutive quarters, revenue has fallen. Revenue declined 17% to $738.2 million in the second quarter. The figure fell 4.7% in the first quarter from the year earlier and dropped 11% in the fourth quarter of the last fiscal year from the year-ago quarter.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from $1.19 per share to $1.15, indicating that analysts are growing pessisimistic about the company’s performance next quarter. For the fiscal year, the average estimate has moved up from $4.23 a share to $4.35 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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