(By Balaseshan) Diamond Offshore Drilling Inc. (NYSE: DO) reported a 17.4% drop in quarterly earnings due to impairment charge as well as a marginal rise in revenue from contract drilling. However, results exceeded Street's expectations.
For the quarter, the Houston, Texas-based offshore oil and gas drilling contractor reported profit of $155.66 million or $1.12 per share, down from $188.5 million or $1.36 per share in the year-ago quarter.
Revenue marginally rose 0.3% to $750.54 million as revenue from contract drilling rose marginally by 0.9%.
Analysts, on average, polled by Thomson Reuters expected earnings of $1.10 per share on revenue of $740.0 million for the fourth quarter.
[Related -Transocean LTD (RIG): Offshore Drillers Could Face Margin Pressure]
Diamond Offshore reclassified its four cold-stacked rigs as held for sale and recognized an after-tax impairment charge of $40.6 million or $0.29 per share. These units are the semi-submersible rigs Ocean Epoch, Ocean New Era and Ocean Whittington and the jack-up rig Ocean Spartan.
Capital expenditures for the six rigs currently under construction totaled $499 million in full-year 2012, excluding capitalized interest. To complete these projects, the company estimates that remaining capital expenditures, excluding capitalized interest, will be $1.3 billion in 2013 and $1.1 billion in 2014.
In addition, the company said the Ocean Patriot was awarded a three-year contract in the North Sea at a rate of $400,500 per day, which is expected to generate maximum total revenue of approximately $439 million.
[Related -Stock Upgrades And Downgrades: ATW, DO, DVN, FLEX, FDS, HOT, HPQ, STX]
Shares of DO ended Monday's regular session up 0.25% at $76.48. The stock has been trading in the 52-week range of $55.83 to $76.85.