Diamond Offshore's (DO) Q3 Earnings Beat, Revenues Miss

Diamond Offshore Drilling Inc. (NYSE:DO) reported third-quarter 2016 adjusted earnings of 10 cents per share that comfortably surpassed the Zacks Consensus Estimate of 7 cents. The bottom line, however, decreased from the year-earlier earnings of $1.01 per share.

Total revenue in the quarter of $349.2 million decreased from the year-ago figure of $388.7 million and also came in below the Zacks Consensus Estimate of $361.51 million.

Operational Performance

In the third quarter, revenues from the Contract Drilling segment plunged 43.3% year over year to approximately $339.6 million.

Ultra-Deepwater floaters recorded an average dayrate of $452,000 during the quarter as against $479,000 in the year-earlier quarter. Deepwater floaters realized an average dayrate of $303,000 compared with $361,000 in the year-ago quarter. Mid-water floaters recorded an average dayrate of $311,000 as against $289,000 in the prior-year quarter.

Rig utilization for Ultra-Deepwater floaters decreased to 48% from 71% in the year-ago quarter. Utilization of Deepwater floaters fell to 34% from 59% a year ago. Mid-water category rig utilization was 33% as against 31% in the comparable quarter last year.

Financials

As of Sep 30, 2016, Diamond Offshore had approximately $81.3 million in cash and cash equivalents, while long-term debt totaled $1,980.6 million.

Zacks Rank and Stocks to Consider

Diamond Offshore currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector are Enbridge Energy Partners, LP (NYSE:EEP) , Braskem SA (NYSE:BAK) and EQT Midstream Partners (NYSE:EQM) . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Enbridge Energy Partners has an impressive earnings surprise history. The partnership posted positive earnings surprise in three of the last four quarters. It reported a positive earnings surprise of 69.23% in the preceding quarter.

Braskem SA posted a positive earnings surprise of 105.45% in the year-ago quarter.

In the last reported quarter, EQT Midstream Partners delivered a positive earnings surprise of 6.72%. Coming to the earnings surprise history, the partnership beat estimates in three of the last four quarters.

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