Diamond Offshore Drilling Q3 Earnings Down - Quick Facts

(RTTNews) - Drilling services contractor Diamond Offshore Drilling, Inc. Thursday reported third-quarter earnings which decreased, as a $109 million impairment charge on retiring six rigs masked revenue growth.

The company announced in an earnings statement today that it will retire and scrap six of its mid-water semisubmersible rigs, which translates into a $0.84 per share after-tax charge that was included in the third-quarter results.

For the three months to September, net earnings were $52.64 million or $0.38 per share, down from $94.75 million or $0.68 per share a year earlier.

Analysts polled by Thomson-Reuters expected earnings of $0.79. Analysts' estimates typically exclude one-time items.

Revenues increased to $737.68 million, from $706.16 million last year, but were shy of the $740.5 million Wall Street expected.

The board recommended a $0.75 per share special quarterly cash dividend as well as a $0.125 per share regular quarterly dividend, payable on December 1 to shareholders of record on November 5.

The company announced that one of its units has entered into term drilling contracts with Hess Corp., which are subject to Hess obtaining full project sanction from partners. Diamond Offshore expects the contracts, which could represent seven years of backlog, to generate $1.02 billion of revenues.

Diamond Offshore has also bagged contract extensions from Petrobras on three ultra-deepwater semisubmersibles, which might generate $1.4 billion revenues and translate into nine years of backlog.

"Today we have announced term contracts and extensions that add more than $2.4 billion to our existing revenue backlog, bringing the total to $8.2 billion," CEO Marc Edwards said.