We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Diamond Offshore (DO): What to Expect in Q2 Earnings?
Read MoreHide Full Article
Leading contract driller Diamond Offshore Drilling Inc. (DO - Free Report) is expected to report second-quarter 2016 earnings on Aug 1.
In the last quarter, the company’s earnings of 64 cents per share crushed the Zacks Consensus Estimate of 28 cents. In fact, the company posted an average positive earnings surprise of 74.89% in the last four quarters. Let’s see how things are shaping up prior to the announcement.
Factors Likely to Influence This Quarter
Diamond Offshore Drilling remains in good financial health and has a track record of disciplined capital outlays and financial conservatism. As of Mar 31, 2016, the company had approximately $128.9 million in cash and cash equivalents, while its long-term debt totaled $1,980.1 million. Diamond Offshore Drilling stresses on boosting its operational performance to survive amid the prolonged downturn in the oil and gas industry.
However, Diamond Offshore Drilling is an offshore drilling company, which makes it heavily reliant on the volume of capital expenditure by the exploration and production sector. The current volatility in the oil and gas prices has put pressure on the activity level of the companies from this sector, thereby affecting the company’s profit levels.
Moreover, the company lacks visible catalysts, which are important for it to renew its fleet in order to improve its position in an extremely competitive marketplace.
Earnings Whispers
Our proven model does not conclusively show that Diamond Offshore Drilling is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -233.33%. This is because the Most Accurate estimate stands at a loss of 4 cents, while the Zacks Consensus Estimate is pegged at earnings of 3 cents.
Zacks Rank: Diamond Offshore Drilling currently carries a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, a negative ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Legacy Reserves LP has an Earnings ESP of +31.58% and a Zacks Rank #1.
Northern Oil and Gas, Inc. (NOG - Free Report) has an Earnings ESP of +20.00% and a Zacks Rank #1.
Spectra Energy Corp (SE - Free Report) has an Earnings ESP of +16.00 % and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Diamond Offshore (DO): What to Expect in Q2 Earnings?
Leading contract driller Diamond Offshore Drilling Inc. (DO - Free Report) is expected to report second-quarter 2016 earnings on Aug 1.
In the last quarter, the company’s earnings of 64 cents per share crushed the Zacks Consensus Estimate of 28 cents. In fact, the company posted an average positive earnings surprise of 74.89% in the last four quarters. Let’s see how things are shaping up prior to the announcement.
Factors Likely to Influence This Quarter
Diamond Offshore Drilling remains in good financial health and has a track record of disciplined capital outlays and financial conservatism. As of Mar 31, 2016, the company had approximately $128.9 million in cash and cash equivalents, while its long-term debt totaled $1,980.1 million. Diamond Offshore Drilling stresses on boosting its operational performance to survive amid the prolonged downturn in the oil and gas industry.
DIAMOND OFFSHOR Price and EPS Surprise
DIAMOND OFFSHOR Price and EPS Surprise | DIAMOND OFFSHOR Quote
However, Diamond Offshore Drilling is an offshore drilling company, which makes it heavily reliant on the volume of capital expenditure by the exploration and production sector. The current volatility in the oil and gas prices has put pressure on the activity level of the companies from this sector, thereby affecting the company’s profit levels.
Moreover, the company lacks visible catalysts, which are important for it to renew its fleet in order to improve its position in an extremely competitive marketplace.
Earnings Whispers
Our proven model does not conclusively show that Diamond Offshore Drilling is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -233.33%. This is because the Most Accurate estimate stands at a loss of 4 cents, while the Zacks Consensus Estimate is pegged at earnings of 3 cents.
Zacks Rank: Diamond Offshore Drilling currently carries a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, a negative ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Legacy Reserves LP has an Earnings ESP of +31.58% and a Zacks Rank #1.
Northern Oil and Gas, Inc. (NOG - Free Report) has an Earnings ESP of +20.00% and a Zacks Rank #1.
Spectra Energy Corp (SE - Free Report) has an Earnings ESP of +16.00 % and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>