Diamond Offshore Drilling Inc.
) reported fourth quarter 2012 earnings of $1.12 per share,
surpassing the Zacks Consensus Estimate of $1.10. The
outperformance was mainly backed by higher ultra deepwater and
jackup rig utilization. However, the quarterly results decreased
17.6% from the year-earlier earnings of $1.36 per share.
For full-year 2012, the company registered earnings of $5.18 per
share, comfortably beating the Zacks Consensus Estimate of $4.67
per share but decreasing 25.1% from the year-earlier earnings of
$6.92 per share.
Total revenue in the quarter increased marginally by 0.3% year
over year to $750.5 million, beating the Zacks Consensus Estimate
of $737.0 million. In 2012, total revenue decreased 10.1% year
over year to $2,986.5 million. However, total revenue beat the
Zacks Consensus Estimate of $2,969 million.
Diamond Offshore declared a special dividend of 75 cents per
share in the quarter, unchanged from the prior quarter. The
company will also pay its regular quarterly dividend of 12.5
cents per share (50 cents per share annualized).
In the fourth quarter, revenue from the Contract Drilling segment
inched up 0.9% year over year to $740.6 million, mainly due to a
1.4% increase in total floaters revenue. These floaters accounted
for 94.7% of the total quarterly contract drilling revenue, while
jackups contributed 5.3%.
Ultra-Deepwater floaters recorded an average dayrate of $348,000
during the quarter, down from $356,000 in the year-earlier
quarter. Deepwater floaters realized an average dayrate of
$372,000 versus $422,000 in the year-ago quarter. Mid-water
floaters recorded an average dayrate of $268,000, down from
$271,000 in the year-earlier quarter. Jackup rigs' dayrates
averaged $85,000, up from $79,000 in the fourth quarter of 2011.
Rig utilization for Ultra-Deepwater floaters increased to 89%
from 70% in the year-ago quarter. Utilization of Deepwater
floaters dropped to 85% during the quarter from 97% in the
year-ago quarter. Mid-water category rig utilization was 70%
compared with 60% in the comparable quarter last year while
jackup rig utilization increased to 71% from 36%.
As of Dec 31, 2012, Diamond Offshore had approximately $335.4
million in cash and cash equivalents, while long-term debt stood
at $1,496.1 million. Debt-to-capitalization ratio at the end of
the quarter was 24.6% (down from about 24.8% in the preceding
Houston, Texas-based Diamond Offshore exhibits long-term earnings
growth visibility based on its strong leverage to the offshore
deepwater drilling market. Additionally, the company's
significant free cash flow generation potential and healthy
balance sheet enhances the possibility of further share buybacks
and/or special dividends, going forward.
) reported fourth quarter 2012 earnings of 50 cents per share,
failing to meet the Zacks Consensus Estimate of 62 cents, mainly
due to the extended downtime in the deepwater.
However, given the volatile oil and gas price scenario as well as
geopolitical risks associated with international operations, we
maintain a Zacks #3 Rank (short-term Hold rating) on Diamond
Cabot Oil & Gas Corp
) are other oil and gas stocks, carrying a Zacks Rank #1 (Strong
Buy) and thus expected to perform better over the next one to
CABOT OIL & GAS (COG): Free Stock Analysis
DIAMOND OFFSHOR (DO): Free Stock Analysis
NOBLE CORP (NE): Free Stock Analysis Report
TOTAL FINA SA (TOT): Free Stock Analysis
To read this article on Zacks.com click here.