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SeaDrill (SDRL) Q4 Earnings and Revenues Beat Estimates
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Offshore contract driller SeaDrill Limited (SDRL - Free Report) reported strong fourth-quarter 2016 earnings owing to a decrease in operating expenses.
Earnings per share – excluding one-time items − came in at 24 cents. The bottom line surpassed the Zacks Consensus Estimate of 13 cents per share but deteriorated from the year-ago adjusted figure of 54 cents.
Total operating revenue of $667 million was down 30.4% from $959 million in fourth-quarter 2015. The top line, however, beat the Zacks Consensus Estimate of $634 million.
Segmental Analysis
Floaters:This segment reported revenues of $458 million compared with $644 million in the year-ago quarter. Net operating income was $101 million as against the prior-year quarter figure of $117 million.
Seadrill Limited Price, Consensus and EPS Surprise
Jack-up Rigs: The segment registered revenues of $186 million as against $282 million in the prior-year quarter. Net operating income plummeted to $27 million from the fourth-quarter 2015 figure of $102 million.
Other: Revenues of $23 million were lower than $33 million reported in the prior-year quarter. Operating loss of $10 million compared unfavorably with the prior-year profit of $4 million.
Backlog
As of Feb 28, 2017, total order backlog of SeaDrill was $2.5 billion.
Expenses
SeaDrill incurred operating expenses of $555 million in the reported quarter. This reflects a significant decline from the year-ago quarter figure of $662 million.
Like other offshore contract drillers, SeaDrill too has decided to focus on controlling costs amid plummeting crude prices. As part of the initiative, SeaDrill has trimmed its headcount from 6,995 at year-end 2015 to 5,271 at year-end 2016.
Capital Expenditure & Balance Sheet
As of Dec 31, 2016, SeaDrill had cash and cash equivalents of $1.4 billion and long-term debt of $9,514 million (including current portion). The debt-to-capitalization ratio was approximately 49.9%.
Guidance
The company projects first-quarter operating income of approximately $50 million.
Zacks Rank and Key Picks
Headquartered in London, SeaDrill is one of the leading offshore drilling contractors in the world. The company has one of the youngest drilling fleet among the offshore drilling contractors and is capable of operating in challenging environments.
The company currently carries a Zacks Rank #3 (Hold), implying that it will perform in line with the broader U.S. equity market over the next one to three months.
In the last four quarters, Sunrun posted an average positive earnings surprise of 134.7%.
In the second last quarter, Delek Logistics Partners posted a positive earnings surprise of 13.8%.
In the last four quarters, Ultra Petroleum posted a positive earnings surprise of 93.7%.
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SeaDrill (SDRL) Q4 Earnings and Revenues Beat Estimates
Offshore contract driller SeaDrill Limited (SDRL - Free Report) reported strong fourth-quarter 2016 earnings owing to a decrease in operating expenses.
Earnings per share – excluding one-time items − came in at 24 cents. The bottom line surpassed the Zacks Consensus Estimate of 13 cents per share but deteriorated from the year-ago adjusted figure of 54 cents.
Total operating revenue of $667 million was down 30.4% from $959 million in fourth-quarter 2015. The top line, however, beat the Zacks Consensus Estimate of $634 million.
Segmental Analysis
Floaters:This segment reported revenues of $458 million compared with $644 million in the year-ago quarter. Net operating income was $101 million as against the prior-year quarter figure of $117 million.
Seadrill Limited Price, Consensus and EPS Surprise
Seadrill Limited Price, Consensus and EPS Surprise | Seadrill Limited Quote
Jack-up Rigs: The segment registered revenues of $186 million as against $282 million in the prior-year quarter. Net operating income plummeted to $27 million from the fourth-quarter 2015 figure of $102 million.
Other: Revenues of $23 million were lower than $33 million reported in the prior-year quarter. Operating loss of $10 million compared unfavorably with the prior-year profit of $4 million.
Backlog
As of Feb 28, 2017, total order backlog of SeaDrill was $2.5 billion.
Expenses
SeaDrill incurred operating expenses of $555 million in the reported quarter. This reflects a significant decline from the year-ago quarter figure of $662 million.
Like other offshore contract drillers, SeaDrill too has decided to focus on controlling costs amid plummeting crude prices. As part of the initiative, SeaDrill has trimmed its headcount from 6,995 at year-end 2015 to 5,271 at year-end 2016.
Capital Expenditure & Balance Sheet
As of Dec 31, 2016, SeaDrill had cash and cash equivalents of $1.4 billion and long-term debt of $9,514 million (including current portion). The debt-to-capitalization ratio was approximately 49.9%.
Guidance
The company projects first-quarter operating income of approximately $50 million.
Zacks Rank and Key Picks
Headquartered in London, SeaDrill is one of the leading offshore drilling contractors in the world. The company has one of the youngest drilling fleet among the offshore drilling contractors and is capable of operating in challenging environments.
The company currently carries a Zacks Rank #3 (Hold), implying that it will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked players from the broader energy sector include Sunrun Inc. (RUN - Free Report) , Delek Logistics Partners, L.P. (DKL - Free Report) and Ultra Petroleum Corp. . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Sunrun posted an average positive earnings surprise of 134.7%.
In the second last quarter, Delek Logistics Partners posted a positive earnings surprise of 13.8%.
In the last four quarters, Ultra Petroleum posted a positive earnings surprise of 93.7%.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>