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Analyzing Diamond Offshore’s 4Q17 Revenues

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4Q17 revenue

Diamond Offshore Drilling (DO) earns revenue by operating floating rigs and jack-up rigs. Diamond Offshore Drilling’s total 4Q17 drilling revenue was $338 million—a fall of almost 6% from the previous quarter’s drilling revenue of $357 million and a 12% fall year-over-year. The quarterly fall in revenue was mainly driven by two rigs—Ocean Patriot and Ocean Monarch. The two rigs came off contract in the fourth quarter. The decrease was partially offset by the full quarter operations of Ocean Courage, which was undergoing upgrades in the third quarter.

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Revenue breakdown

In 4Q17, 76% of Diamond Offshore’s drilling revenue came from the ultra-deepwater segment. The segment’s revenue rose to $288 million in 4Q17 from $275 million in the previous quarter. Its 4Q17 deepwater segment’s revenue was $31 million—a 10.6% fall from $35.6 million in 3Q17.

Peers’ revenue

The other offshore drilling (XLE) companies haven’t released their 4Q17 results yet. Wall Street analysts’ expectations are:

  • Transocean’s (RIG) revenue is expected to fall 12.2% to $622 million in 4Q17—compared to $709 million in the previous quarter.
  • Rowan Companies’ (RDC) revenue is expected to fall 8.5% quarter-over-quarter.
  • Noble Corporation’s (NE) 4Q17 estimated revenue is $280 million—a 5% rise from $266 million in 3Q17.

Forward revenues

Diamond Offshore could be expecting another sequential fall in revenue for 1Q18. Ocean Apex’s contract will end in early March 2018. Also, the full quarter impact of the contract that ended on Ocean Patriot and Ocean Monarch in 4Q17 will likely have a negative impact on the company’s 1Q18 revenue. Only one contract is expected to commence in 1Q18, which will partially offset the decrease in revenue.

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