Diamond Offshore 1Q Earnings Fall 14% But Beat Consensus

Date : 04/21/2011 @ 7:45AM
Source : Dow Jones News
Stock : Diamond Offshore Drilling, Inc. (DO)
Quote : 14.42  -0.07 (-0.48%) @ 6:42PM

Diamond Offshore 1Q Earnings Fall 14% But Beat Consensus

Diamond Offshore Drilling (NYSE:DO)
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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; joan.solsman@dowjones.com

 
 



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