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SeaDrill Limited Q1 Earnings Excel - Analyst Blog

On May 28, 2014, Norwegian oilfield service firm, SeaDrill Limited ( SDRL ) reported strong first-quarter 2014 earnings. The key driver was the excellent performance by the Floaters segment.

Earnings per share came in at $6.23, breezing past the Zacks Consensus Estimate of 70 cents. The bottom line also increased significantly from the year-ago figure of 85 cents.

Total operating revenue of $1,221.0 million was down 3.5% from the first-quarter 2013 level. The top line also failed to beat the Zacks Consensus Estimate of $1,439.0 million. Lower contract revenue hampered the results.

Segmental Analysis

Floaters: This segment reported revenues of $787.0 million against $757.0 in the year-ago quarter. Net operating income of $784.0 million was also up from the year-ago figure of $317.0 million.

Jack-up Rigs: The segment registered revenues of $305.0 million compared with $256.0 million in the prior-year quarter. Net operating income of $103.0 million was, however, down 29.0% from $145.0 million recorded in the first quarter of 2013.

Tender Rigs: Operating profit of $3.0 million was down 97.0% from the prior-year profit of $90.0 million.

Backlog

On a consolidated basis, the total order backlog of SeaDrill Limited stands at $18.8 billion.

Expenses

SeaDrill Limited incurred operating expenses of $771.0 million in the reported quarter, reflecting a marginal decrease from the year-ago quarter.

Dividend

SeaDrill Limited declared quarterly cash dividend of $1.00, representing an increase of 2.0% from the dividend paid in the previous quarter. The dividend will be paid on Jun 19, 2014.

Capital Expenditure & Balance Sheet

As of Mar 31, 2014, SeaDrill Limited had cash and cash equivalents of $912.0 million and long-term debt of $12,390.0 million (including current portion). The debt-to-capitalization ratio was approximately 53.7%.

Zacks Rating

SeaDrill Limited currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at better-ranked players in the same industry like Pioneer Energy Services Corp. ( PES ), Helmerich & Payne Inc. ( HP ) and Patterson-UTI Energy Inc. ( PTEN ). Pioneer Energy sports a Zacks Rank #1 (Strong Buy), while Helmerich & Payne and Patterson-UTI carry a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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