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Will Diamond Offshore’s Revenue Rise in 2Q17?

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Analysts’ revenue estimates

Wall Street analysts expect revenue of just over $380 million for Diamond Offshore Drilling (DO) in 2Q17. This revenue would represent a 1.6% rise from DO’s revenue of $374 million in 1Q17, and it would represent a 2% fall from its 2Q16 revenue of $388 million.

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Revenue sources and fiscal 2017 estimates

Diamond Offshore’s total revenue comes from four segments: ultra-deepwater, deepwater, mid-water, and jack-up rigs. The company operates its rigs in the United States, South America, Europe, Australia, Asia, and Mexico.

Analysts expect Diamond Offshore’s third-quarter revenue to be similar to its 2Q16 revenue of $380 million. The offshore drilling downturn, which started in late 2014, started a downfall in its revenue. DO’s 2015 revenue fell 14% to $2.4 billion. Its 2016 revenue fell to $1.6 billion. This fall is expected to continue for the next two years.

Analysts expect DO’s 2017 and 2018 revenues to be $1.5 billion and $1.3 billion, respectively.

Peer comparison

The following are analysts’ 2Q17 revenue estimates for other offshore drillers (OIH):

  • Analysts expect Transocean’s (RIG) 2Q17 revenue to fall 24.5% YoY to $712.0 million.
  • Analysts expect Noble Corporation’s (NE) 2Q17 revenue to fall 68% YoY to $284.0 million.
  •  Analysts expect Atwood Oceanics’ (ATW) fiscal 3Q17 revenue to fall 45.8% YoY to $123.0 million.
  • Analysts expect Rowan Companies’ (RDC) 2Q17 revenue to fall 40.7% YoY to $291.0 million.

Based on analysts’ 2017 revenue expectations and Diamond Offshore’s 2017 backlog, we can infer that analysts don’t expect the company to secure any new contracts.

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