Diamond Offshore Drilling Inc.’s (DO) fourth-quarter earnings fell 22% as the oil driller reported weaker revenue and lower utilization rates for its mid-water floaters.
The fourth quarter marks a reversal for the company, after it posted two preceding quarters with rising revenue and profits. The company had warned that scheduled maintenance would reduce the number of earning days for several rigs in the second half.
Deep-water drilling was suspended for about 10 months in response to 2010’s Deepwater Horizon rig explosion, which killed 11 workers and touched off the worst offshore oil spill in U.S. history. It wasn’t until last February when U.S. regulators began approving deep-water drilling projects, which face heightened scrutiny.
Houston-based Diamond Offshore, which is majority owned by Loews Corp. (L), reported a profit of $188.5 million, or $1.36 a share, down from $241.7 million, or $1.74 a share, a year earlier. Revenue fell 11% to $748.4 million.
Analysts polled by Thomson Reuters had most recently forecast earnings of 99 cents a share on revenue of $739 million.
Operating margin sank to 29.2% from 39.9%.
The average day rate for ultra-deepwater floaters rose 4.4% from a year earlier, while the utilization rate stayed at 70% from a year earlier. For mid-water floaters, day rates dropped 4.9% and the utilization rate slipped to 60% from 80%.
Shares closed Wednesday at $63.07 and were inactive premarket. The stock is down 2% over the past three months.
-By Ben Fox Rubin, Dow Jones Newswires