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Offshore drilling contractor Atwood Oceanics (NYSE:ATW) reported earnings after the bell Thursday that blew out expectations on the bottom line, as well as showed a huge increase in revenues year over year. Investors looking for a cheap growth play in this space should take a hard look at Atwood as it appears as if the company is starting to hit on all cylinders.

Here are the key earnings highlights:

  • The company reported earnings of $1.45 a share, 23 cents above consensus estimates and significantly above the $1.12 a share Atwood reported for the same quarter last year.
  • Revenues came in at $252.5 million, significantly above the $177.6 million reported in Q3 2011.
  • The company brought two new rigs online during the quarter: the Attwood Mako and the Atwood Condor in the Gulf of Mexico.
  • Atwood also secured its first drilling services agreement for the Atwood Advantage.

Atwood Oceanics is an offshore drilling contractor that owns 10 mobile offshore drilling units and has an ultradeepwater semisubmersible, two ultradeepwater drillships, and three high-specification jackups under construction.

Here are four additional reasons why ATW is still a solid growth play at under $48 a share:

  1. As new rigs come online, revenue is exploding. The company should book a 30% revenue increase in FY 2012 and analysts have over 25% in increases projected in FY 2013. The stock sports a minuscule five-year projected PEG (0.46).
  2. ATW sells for less than seven times forward earnings, a discount to its five-year average (9.0).
  3. The stock sells toward the bottom of its five-year valuation range based on P/S, P/CF, and P/B. There has been net insider buying in the shares over the last six months.
  4. The Atwood Manta, a new jackup, should be become operational in the fourth quarter and is already under contract. S&P rates Atwood's shares as a "Buy."
Source: Atwood Oceanics: Fast-Growing Drilling Contractor Crushes Earnings Estimates