Diamond Offshore Drilling Inc. Earnings: Revenue Falls After Two Straight Increases as Profit Drops

S&P 500 (NYSE:SPY) component Diamond Offshore Drilling Inc. (NYSE:DO) reported its results for the fourth quarter. 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 Fourth Quarter

Results: Net income for Diamond Offshore Drilling Inc. fell to $188.5 million ($1.36 per share) vs. $241.7 million ($1.74 per share) a year earlier. This is a decline of 22% from the year earlier quarter.

Revenue: Fell 11% to $748.4 million from the year earlier quarter.

Actual vs. Wall St. Expectations: Diamond Offshore Drilling Inc. beat the mean analyst estimate of 99 cents per share. Analysts were expecting revenue of $738.7 million.

Quoting Management: “The $1.2 billion of revenue backlog we were able to add since the end of the last quarter demonstrates the strong demand in all of our key markets,” said Larry Dickerson, President and Chief Executive Officer of Diamond Offshore. “Our newbuild drillships, the Ocean BlackHawk and Ocean BlackHornet, have long-term contracts beginning in Q4 2013 and Q2 2014. Additionally, given the strong current environment, we think significant opportunity exists for our third newbuild drillship, the Ocean BlackRhino, as well as for deepwater units such as our recently announced Ocean Onyx.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 38 cents in the third quarter, by 2 cents in the second quarter, and by 36 cents in the first quarter.

A year-over-year revenue decrease last quarter snaps a streak of two consecutive quarters of revenue increases. Revenue rose 9.8% in the third quarter and 8.1% in the second quarter.

Last quarter’s profit decrease breaks a streak of two consecutive quarters of year-over-year profit increases. Net income rose 29.4% in the third quarter and 18.8% in the second quarter.

Looking Forward: Over the past ninety days, the average estimate for the first quarter of the next fiscal year has fallen from $1.07 per share to $1.04, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year is $6.48 per share, a rise from $6.41 ninety days ago.

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

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com