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Analyzing Offshore Drilling Companies’ First-Quarter EBITDA

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First-quarter earnings

In the previous part, we compared five offshore drilling companies’ revenue performances in the first quarter. In this part, we’ll look at their first-quarter EBITDA.

Why look at the EBITDA?

The EBITDA shows a company’s financial performance. The metric provides a company’s operating profit. Offshore drilling companies are very capital-intensive operations and have high non-cash costs including depreciation. As a result, investors should assess the performance of these companies based on the EBITDA.

Comparative analysis 

  • In the first quarter, Ensco’s (ESV) EBITDA fell to $91.3 million from $98.4 million in the fourth quarter of 2017. The first-quarter EBITDA was 45.3% lower YoY (year-over-year).
  • Diamond Offshore Drilling’s (DO) EBITDA in the first quarter was $85.12 million—compared to $113.5 million in the previous quarter. The company’s EBITDA fell 25% sequentially. On a YoY basis, the company’s EBITDA was 40.9% lower than its EBITDA of $144 million in the first quarter of 2017.
  • Transocean (RIG) recorded an EBITDA of $208 million in the first quarter—a rise of 29% from its EBITDA of $161 million in the previous quarter. Transocean’s first quarter EBITDA was 41.9% lower YoY—compared to its EBITDA of $358 million in the first quarter of 2017.
  • In the first quarter, Noble (NE) recorded an EBITDA of $71.8 million—60.4% lower than its EBITDA of $181.5 million in the first quarter of 2017 and 36% lower than its EBITDA of $112.02 million in the previous quarter.
  • Rowan Companies (RDC) recorded an EBITDA of $25.6 million—down from $82.9 million in the previous quarter and 180.3 million in the first quarter of 2017—a fall of 85.8% YoY and 69% sequentially.

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