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Why Analysts Expect a Rise in Diamond Offshore’s 3Q17 Revenue

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3Q17 results

Previously in this series, we saw that most analysts rate Diamond Offshore Drilling (DO) a “hold.” In this part of our series, we’ll see how analysts view Diamond Offshore Drilling’s 3Q17 revenues and EBITDA (earnings before interest, taxes, depreciation, and amortization). The company is set to release its 3Q17 results on October 30.

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Revenue estimates

The above chart shows Diamond Offshore’s consensus yearly revenue and EBITDA estimates. Analysts expect Diamond Offshore to deliver revenues of $363 million in 3Q17—a fall of 4.1% YoY (year-over-year). The estimate is below the company’s revenues of $399 million in 2Q17.

Among its peers, Diamond Offshore is the only offshore driller (OIH) expected to have higher 3Q17 revenues YoY. Analysts expect Transocean’s (RIG) 3Q17 revenues to fall 22.5% YoY. Seadrill’s (SDRL) revenues are expected to be 35% lower while Noble Corporation’s (NE) revenues are expected to be 30% lower YoY.

Going forward, analysts expect Diamond Offshore Drilling’s 4Q17 revenues to be $336 million. Based on the company’s current contracts, its revenue backlog for the second half of 2017 stands at ~$707,000. Analysts estimate that Diamond Offshore’s second-half-of-2017 revenues will be ~$699,000. Analysts don’t expect the company to secure new contracts in the near future.

EBITDA estimates

Wall Street analysts expect Diamond Offshore Drilling’s 3Q17 EBITDA (earnings before interest, tax, depreciation, and amortization) to be $142 million—lower than the $178 million it recorded in the previous quarter. The company’s EBITDA estimate for 2017 is $588 million lower than 2016’s EBITDA of $667 million.

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