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Diamond Offshore profit beats estimates as rig dayrates improve

  • Diamond Offshore (DO +3.4%) moves higher after Q1 earnings and revenues came in ahead of Street estimates, and last night's fleet status report outlined short-term contracts on four rigs.
  • Q1 revenues fell to $709M from $729M, while expenses rose to $523M from $516M.
  • Utilization rates for DO's ultra-deepwater rigs fell to 66% in Q1 from 91% in Q4 2013, but dayrates for ultra-deepwater rigs rose nearly 11% Q/Q to $387K while dayrates for deepwater rigs rose ~4% to $418K.
  • DO also said it would pay a special quarterly cash dividend of $0.75/share on top of its regular dividend of $0.13; repurchased 1.87M shares during Q1 at an average price of $46.32.
  • While falling rig demand and utilization is likely to affect the entire sector, analysts expect DO to fare worse than rivals, given the age of its fleet.

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Comments (5)
  • saratogahawk
    , contributor
    Comments (2427) | Send Message
     
    Day rates improving. How could that be? The analysts have been telling us that the sky has fallen and day rates are plummeting. They are never wrong.
    24 Apr 2014, 12:08 PM Reply Like
  • Power Hedge
    , contributor
    Comments (995) | Send Message
     
    Yeah... I've been seeing evidence that the market is already showing signs of tightening for 2015.

     

    A lot of the analysts don't know the difference between a shallow-water rig, an ultra-deepwater floater, and Bandar Rig, Iran.

     

    Look at the jack-up dayrates lately. SDRL is getting some in excess of 200k.
    24 Apr 2014, 02:19 PM Reply Like
  • Debutant
    , contributor
    Comments (2485) | Send Message
     
    Dedicated to the drama queens who have been worshipping the analysts and their forecasts for lower day rates.
    24 Apr 2014, 01:07 PM Reply Like
  • Power Hedge
    , contributor
    Comments (995) | Send Message
     
    That's odd. Reuters (linked above) says that Diamond Offshore has two rigs scheduled to be delivered in 2014 that don't have contracts. I am looking at the company's fleet status report right now and I only see one 2014 rig (Ocean BlackRhino) that doesn't have a contract. Both of the others do.
    24 Apr 2014, 04:35 PM Reply Like
  • saratogahawk
    , contributor
    Comments (2427) | Send Message
     
    Ocean BlackLion isn't scheduled for delivery until Q2 2015. They must be using that as the 2nd unit. Not surprised that a unit still a year and a quarter away from delivery hasn't been contracted yet. Hard to worry about that at all. Analysts will spin anything to get the result they want.
    24 Apr 2014, 04:54 PM Reply Like
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