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Diamond Offshore (DO) Posts Wider-Than-Expected Q4 Loss

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Diamond Offshore Drilling Inc. (DO - Free Report) reported fourth-quarter 2018 adjusted loss of 42 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 40 cents. The company reported a loss of 5 cents in the year-earlier quarter.

In 2018, the company incurred a loss of $1.17 per share, which was narrower than the Zacks Consensus Estimate of a loss of $1.20. The company generated earnings of 82 cents in the year-ago quarter.

Total revenues of $232.5 million declined from $346.2 million in the year-ago quarter. However, the figure missed the Zacks Consensus Estimate of $248 million.

In 2018, total revenues declined 27.1% year over year to $1,083 million. The figure lagged the Zacks Consensus Estimate of $1,090 million.

The quarterly results were affected by lower dayrates and rig utilization from floaters as well as lower revenues in the Contract Drilling segment.


Operational Performance

Per the annual report, Diamond Offshore sold Ocean Scepter in July 2018 and no rigs are included in jack-up fleet.

Floaters recorded an average dayrate of $315,000 compared with $366,000 in the year-earlier quarter. Rig utilization for floaters fell to 46% from 49% in the prior-year quarter.

In the fourth quarter, revenues in the Contract Drilling segment plunged 33.1% year over year to approximately $226 million and lagged the Zacks Consensus Estimate of $247 million.


As of Dec 31, 2018, Diamond Offshore had approximately $154.1 million in cash and cash equivalents, while long-term debt totaled $1,973.9 million.

Q4 Price Performance

During the fourth quarter, Diamond Offshore’s shares have underperformed the industry. The stock has plunged 53% compared with the industry’s 48.8% fall.


Zacks Rank & Key Picks

Diamond Offshore carries a Zacks Rank #3 (Hold).

A few better-ranked players in the energy space are Evergy, Inc (EVRG - Free Report) , Sunoco L.P (SUN - Free Report) and Contura Energy (CTRA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Evergy, through its operating subsidiaries — Kansas City Power & Light Company (KCP&L) and Westar Energy, Inc — provides clean, safe and reliable energy in Kansas and Missouri. The company delivered average negative earnings surprise of 11.1% in the last four quarters.

Headquartered in Houston, TX, Sunoco operates as a wholesale fuel distributor. The company is expected to witness year-over-year earnings decline of 38.9% in 2018.

Bristol-based Contura Energy is a mining company. The company reported average negative surprise of 17.9% in the trailing four quarters.

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