Q2 2018 results
Diamond Offshore released its second-quarter results today before the markets opened. The company posted a loss of $69 million or -$0.5 per share—smaller than the expected loss since the drop in revenue was offset by a 15% dip in costs.
Diamond Offshore earned revenue of $268.8 million—9% lower than the previous quarter and 32.6% lower than Q2 2017’s revenue of $399.2 million.
As of July 1, Diamond Offshore’s total backlog was $2.2 billion. The company secured several new fixtures and added five years of backlog across its sixth-generation drillships. The current contract on the Ocean Blackhawk was extended through the second quarter of 2021. The company also secured two new contracts to begin in 2020.
Diamond Offshore recently launched a blockchain drilling service—the first application of industrial blockchain technology in the offshore drilling industry. The blockchain service is slated to begin in the fourth quarter.
Offshore drilling market
On the second-quarter conference call, Diamond Offshore CEO Marc Edwards stated that the offshore drilling (XLE) market remains challenging but has started to show some improvement. DO expects to see more consolidation in the industry. Edwards also mentioned that there’s been a slight improvement in day rates in certain markets—but not in all markets yet.
Investors reacted positively to DO’s second-quarter results. Around 11:00 AM, the stock was 5.1% higher than its previous day’s closing price. On a year-to-date basis, the stock has gained 7.1%. Transocean (RIG), Rowan Companies (RDC), and Ensco (ESV) have returned 25.4%, -5.3%, and 25.7%, respectively.