DOW JONES NEWSWIRES
Diamond Offshore Drilling Inc.'s (DO) first-quarter earnings fell 14% but beat analysts' consensus estimate. The oil driller posted better-than-expected revenue on lower day rates but higher utilizations for its deep-water vessels.
The company's profit has been sliding in recent quarters on generally weaker day rates and rig-utilization levels. The offshore-drilling sector has been under pressure since last year's Deepwater Horizon disaster in the Gulf of Mexico, when a rig explosion triggered a massive oil spill. U.S. authorities have reined in their new permits for deep-water drilling since then.
Diamond Offshore, which is majority owned by Loews Corp. (L), posted a profit of $250.6 million, or $1.80 a share, down from $290.9 million, or $2.09 a share, a year earlier. Revenue decreased 6.2% to $806.4 million.
Analysts surveyed by Thomson Reuters expected earnings of $1.43 a share on revenue of $797 million.
Operating margin dropped to 39.6% from 49.6%.
The average day rate for Diamond's high-specification floaters fell 15% from a year earlier, while the utilization rate rose to 81% from 79% a year earlier. For intermediate submersibles, day rates fell 1.1% and the utilization rate was were up at 80% from 78%. Both types of vessels typically operate in deeper water than conventional drilling platforms.
Diamond shares closed Wednesday at $76.40 and weren't active premarket. The stock had fallen 16% in the last year.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; firstname.lastname@example.org