It has been about a month since the last earnings report for Diamond Offshore Drilling (DO - Free Report) . Shares have added about 11.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Diamond Offshore Drilling due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Diamond Offshore Q4 Loss Wider-Than-Expected, Revenues Fall Y/Y
Diamond Offshore Drilling Inc. 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. Moreover, 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -28% due to these changes.
Currently, Diamond Offshore Drilling has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Diamond Offshore Drilling has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.