Diamond Offshore profit beats estimates as rig dayrates improve

|About: Diamond Offshore Drilling Inc. (DO)|By:, SA News Editor

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.