DO
$11.70
Diamond Offshore Drilling
$.15
1.30%
Earnings Details
1st Quarter March 2017
Monday, May 01, 2017 6:00:00 AM
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Summary

Diamond Offshore Drilling Beats

Diamond Offshore Drilling (DO) reported 1st Quarter March 2017 earnings of $0.17 per share on revenue of $374.2 million. The consensus earnings estimate was $0.12 per share on revenue of $373.6 million. The Earnings Whisper number was $0.16 per share. Revenue fell 20.5% compared to the same quarter a year ago.

Diamond Offshore Drilling Inc is a global offshore oil and gas drilling contractor. Its fleet offers a range of services worldwide in various markets, including the deep water, harsh environment, conventional semisubmersible and jack-up markets.

Results
Reported Earnings
$0.17
Earnings Whisper
$0.16
Consensus Estimate
$0.12
Reported Revenue
$374.2 Mil
Revenue Estimate
$373.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Diamond Offshore Announces First Quarter 2017 Results

Diamond Offshore Drilling, Inc. (DO) today reported results for the first quarter of 2017.

Three Months Ended
Thousands of dollars, except per share data March 31, 2017
December 31, 2016
Change
Total revenues
$
374,226
$
391,874
(5)%
Operating income
50,859
104,145
(51)%
Net income
23,539
116,082
(80)%
Earnings per diluted share
$
0.17 $
0.85 (80)%

"Despite a continually challenging market, Diamond Offshore achieved earnings per share of $0.17 for the first quarter of 2017," said Marc Edwards, President and Chief Executive Officer. "Overall, I am pleased with our first quarter results and our ability to manage costs, while remaining focused on maintaining our operational and technical excellence. The Ocean GreatWhite, Ocean Scepter and the Ocean BlackRhino all commenced term contracts in the first quarter, enhancing our already strong liquidity." Edwards went on to say, "During the first quarter, the Ocean BlackLion successfully drilled and completed one of the deepest and most complex wells on record in the Gulf of Mexico."

Also during the quarter, the Company executed new contracts for the Ocean Monarch in Australia, the first of which is scheduled to commence in late first quarter of 2018. Combined, these contracts add nine months of backlog and will keep the Ocean Monarch contracted through 2018. Additionally, the Company executed a new two-year term contract with Apache for the Ocean Patriot in the North Sea. The rig is scheduled to commence its new program in the second quarter of 2018.

As of March 31, 2017, the Company’s total contracted backlog was $3.2 billion, which represents 23 rig years of work.

CONFERENCE CALL

A conference call to discuss Diamond Offshore’s earnings results has been scheduled for 7:30 a.m. CDT today. A live webcast of the call will be available online on the Company’s website, www.diamondoffshore.com. Those interested in participating in the question and answer session should dial 844-492-6043 or 478-219-0839, for international callers. The conference ID number is 1792549. An online replay will also be available on www.diamondoffshore.com following the call.

ABOUT DIAMOND OFFSHORE

Diamond Offshore is a leader in offshore drilling, providing contract drilling services to the energy industry around the globe. Additional information and access to the Company’s SEC filings are available at www.diamondoffshore.com. Diamond Offshore is owned 53% by Loews Corporation (L).

FORWARD-LOOKING STATEMENTS

Statements contained in this press release or made during the above conference call that are not historical facts are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are inherently uncertain and subject to a variety of assumptions, risks and uncertainties that could cause actual results to differ materially from those anticipated or expected by management of the Company. A discussion of the important risk factors and other considerations that could materially impact these matters as well as the Company’s overall business and financial performance can be found in the Company’s reports filed with the Securities and Exchange Commission, and readers of this press release are urged to review those reports carefully when considering these forward-looking statements. Copies of these reports are available through the Company’s website at www.diamondoffshore.com. These risk factors include, among others, risks associated with worldwide demand for drilling services, level of activity in the oil and gas industry, renewing or replacing expired or terminated contracts, contract cancellations and terminations, maintenance and realization of backlog, competition and industry fleet capacity, impairments and retirements, operating risks, changes in tax laws and rates, regulatory initiatives and compliance with governmental regulations, construction of new builds, casualty losses, and various other factors, many of which are beyond the Company’s control. Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended,
March 31,
2017
2016
Revenues:
Contract drilling
$
363,557
$
443,523
Revenues related to reimbursable expenses
10,669
27,020
Total revenues
374,226
470,543
Operating expenses:
Contract drilling, excluding depreciation
203,523
212,841
Reimbursable expenses
10,478
26,791
Depreciation
93,229
104,240
General and administrative
17,483
15,398
Gain on disposition of assets
(1,346)
(296)
Total operating expenses
323,367
358,974
Operating income
50,859
111,569
Other income (expense):
Interest income
175
173
Interest expense
(27,596)
(25,516)
Foreign currency transaction gain (loss)
1,087
(3,608)
Other, net
(63)
578
Income before income tax (expense) benefit 24,462
83,196
Income tax (expense) benefit
(923)
4,229
Net income
$
23,539
$
87,425
Income per share
$
0.17
$
0.64
Weighted-average shares outstanding:
Shares of common stock
137,173
137,162
Dilutive potential shares of common stock
77
44
Total weighted-average shares outstanding
137,250
137,206
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
Three Months Ended
March 31,
December 31,
March 31,
2017
2016
2016
REVENUES
Floaters:
Ultra-Deepwater
$
243,465
$
231,820
$
325,961
Deepwater
67,943
64,678
59,117
Mid-Water
48,285
88,130
47,672
Total Floaters
359,693
384,628
432,750
Jack-ups
3,864
18
10,773
Total Contract Drilling Revenue
363,557
384,646
$
443,523
Revenues Related to Reimbursable Expenses $
10,669
$
7,228
$
27,020
CONTRACT DRILLING EXPENSE
Floaters:
Ultra-Deepwater
$
141,873
$
119,490
$
123,736
Deepwater
33,080
30,481
47,509
Mid-Water
19,267
16,814
23,884
Total Floaters
194,220
166,785
195,129
Jack-ups
5,323
3,090
6,055
Other
3,980
4,467
11,657
Total Contract Drilling Expense
$
203,523
$
174,342
$
212,841
Reimbursable Expenses
$
10,478
$
6,775
$
26,791
OPERATING INCOME
Floaters:
Ultra-Deepwater
$
101,592
$
112,330
$
202,225
Deepwater
34,863
34,197
11,608
Mid-Water
29,018
71,316
23,788
Total Floaters
165,473
217,843
237,621
Jack-ups
(1,459)
(3,072)
4,718
Other
(3,980)
(4,467)
(11,657)
Reimbursable expenses, net
191
453
229
Depreciation
(93,229)
(86,031)
(104,240)
General and administrative expense
(17,483)
(14,786)
(15,398)
Bad debt recovery
--
265
--
Gain (loss) on disposition of assets
1,346
(6,060)
296
Total Operating Income
$
50,859
$
104,145
$
111,569
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
March 31,
December 31,
2017
2016
ASSETS
Current assets:
Cash and cash equivalents
$
123,316
$
156,233
Marketable securities
24
35
Accounts receivable, net of allowance for bad debts
286,408
247,028
Prepaid expenses and other current assets
105,355
102,111
Asset held for sale
400
400
Total current assets
515,503
505,807
Drilling and other property and equipment, net of accumulated depreciation 5,616,367
5,726,935
Other assets
137,073
139,135
Total assets
$
6,268,943
$
6,371,877
LIABILITIES AND STOCKHOLDERS’ EQUITY
Short-term borrowings
$
--
$
104,200
Other current liabilities
201,583
236,299
Long-term debt
1,981,169
1,980,884
Deferred tax liability
191,594
197,011
Other liabilities
120,602
103,349
Stockholders’ equity
3,773,995
3,750,134
Total liabilities and stockholders’ equity
$
6,268,943
$
6,371,877
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three months ended
March 31,
2017
2016
Operating activities:
Net income
$
23,539
$
87,425
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation
93,229
104,240
Deferred tax provision
(5,988)
(45,254)
Other
17,367
19,957
Net changes in operating working capital
(29,471)
74,962
Net cash provided by operating activities
98,676
241,330
Investing activities:
Capital expenditures (including rig construction)
(29,487)
(58,114)
Proceeds from disposition of assets, net of disposal costs 2,097
113,295
Other
11
11
Net cash (used in) provided by investing activities
(27,379)
55,192
Financing activities:
Repayment of short-term borrowings, net
(104,200)
(286,589)
Other
(14)
(33)
Net cash used in financing activities
(104,214)
(286,622)
Net change in cash and cash equivalents
(32,917)
9,900
Cash and cash equivalents, beginning of period
156,233
119,028
Cash and cash equivalents, end of period
$
123,316
$
128,928
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATE, UTILIZATION AND OPERATIONAL EFFICIENCY
(Dayrate in thousands)
First Quarter
Fourth Quarter
First Quarter
2017
2016
2016
Average
Utilization (2)
Operational Efficiency
Average
Utilization (2)
Operational Efficiency
Average
Utilization (2)
Operational Efficiency
Dayrate (1)
(3)
Dayrate (1)
(3)
Dayrate
(3)
(1)
Ultra-Deepwater Floaters
$450
50%
91.1%
$456
49%
92.0%
$533
61%
98.4%
Deepwater Floaters
$260
48%
96.6%
$287
39%
92.1%
$334
28%
97.1%
Mid-Water floaters
$268
40%
100.0%
$478
35%
99.9%
$263
25%
97.7%
Jack-ups
$75
29%
99.9%
--
--
--
$118
18%
100.0%
Fleet Total
94.3%
93.5%
98.2%
(1)
Average dayrate is defined as contract drilling revenue for all of the specified rigs in our fleet per revenue- earning day.
A revenue-earning day is defined as a 24-hour period during which a rig earns a dayrate after commencement of operations and excludes mobilization, demobilization and contract preparation days.
(2)
Utilization is calculated as the ratio of total revenue-earning days divided by the total calendar days in the period for all specified rigs in our fleet (including cold-stacked rigs, but excluding rigs under construction).
Our current fleet includes four ultra-deepwater, three deepwater and three mid-water semisubmersible rigs that are cold stacked.
(3)
Operational efficiency is calculated as the ratio of total revenue-earning days divided by the sum of total revenue-earning days plus the number of days (or portions thereof) associated with unanticipated equipment downtime.

Contact: Samir AliSr. Director, Investor Relations & Corporate Development(281) 647-4035

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SOURCE Diamond Offshore Drilling, Inc.

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