Diamond Offshore Drilling Earnings Preview

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Diamond Offshore Drilling (NYS: DO) will try to beat its earnings estimates for the fourth consecutive quarter. The company will unveil its latest earnings on Thursday. Diamond Offshore Drilling offers a range of services worldwide in various oil and gas drilling markets, including the deepwater, harsh environment, conventional semisubmersible, and jack-up markets.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Diamond Offshore Drilling with 13 of 24 analysts rating it hold. Analysts don't like Diamond Offshore Drilling as much as competitor Noble overall. Twenty-three out of 27 analysts rate Noble a buy compared to four of 24 for Diamond Offshore Drilling. While analysts still rate the stock a moderate sell, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $820.8 million in revenue this quarter. That would represent a rise of 2.6% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.47 per share. Estimates range from $1.21 to $1.64.

What our community says:
CAPS All-Stars are solidly backing the stock with 97.3% granting it an outperform rating. The community at large concurs with the All-Stars with 97.8% assigning it a rating of outperform. Fools are gung-ho about Diamond Offshore Drilling and haven't been shy with their opinions lately, logging 552 posts in the past 30 days. Diamond Offshore Drilling has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
Diamond Offshore Drilling's income has fallen year over year by an average of 13.2% over the past five quarters. The company's gross margin shrank by 2.1 percentage points in the last quarter. Revenue rose 8.1% while cost of sales rose 13.3% to $407.3 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

54.2%

53.0%

51.9%

50.1%

Operating Margin

41.3%

39.6%

39.9%

39.7%

Net Margin

30.0%

31.1%

28.7%

24.8%

For all our Diamond Offshore Drilling-specific analysis, including earnings and beyond, add Diamond Offshore Drilling to My Watchlist.

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At the time this article was published

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