Back to top

Analyst Blog

On Jun 29, Zacks Investment Research upgraded Ocean Rig UDW Inc. (ORIG - Snapshot Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

The ultra deep water rig provider delivered positive earnings surprises in two out of the last three quarters with an average beat of 45.6%. Ocean Rig has witnessed an upward revision in earnings estimates on the back of strong first quarter results.

Ocean Rig’s first quarter 2013 earnings per share came in at 5 cents, surpassing the Zacks Consensus Estimate by 122.7%. Total revenue at the end of the first quarter was $246.4 million, surpassing the year-ago results by 51.2% and the Zacks Consensus Estimate of $221 million by 12.1%.  

A key positive for the company is the promising outlook on the ultra deep water drilling industry. Ocean Rig signed nearly 20 new contracts or extensions year to date, excluding the exercise of existing options. The company’s current backlog of $4.9 billion indicates that major oil and gas companies like Total S.A. (TOT - Analyst Report), ExxonMobil (XOM - Analyst Report) and ConocoPhillips (COP - Analyst Report) among others will have to depend on Ocean Rig for the supply of rigs for heightened deepwater exploration.

The new ultra deep water drilling areas in East Africa and the Asia/Pacific are coming into prominence besides traditional regions like the Gulf of Mexico and West Africa. Ocean Rig’s decision to take delivery of three new ultra water rigs in the second half of 2013 seems to be well timed. These new drillships will allow the company to reap the benefits of strong demand for deepwater rigs.

The Zacks Consensus Estimate for 2013 increased 171.4% in the last 60 days to 38 cents per share, reflecting a year-over-year projected growth of 176.0%.  The Zacks Consensus Estimate for 2014 increased 3.8% in the last 60 days to $2.18 per share, reflecting a year-over-year projected growth of 474.4%. 

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 2.99 +2.75%
CTPARTNERS… CTP 16.25 +2.33%
CHINA BIOLO… CBPO 46.93 +1.88%
THE PANTRY… PTRY 20.97 +1.82%
NN INC NNBR 28.43 +1.46%