Diamond Offshore 4Q Net Falls 17% Amid Lower Day Rates

Diamond Offshore Drilling Inc.'s fourth-quarter earnings fell 17% as lower day rates dampened improved utilization of ultradeep-water and midwater floaters.

Results topped consensus estimates and the contract driller's board once again declared a special cash dividend of 75 cents a share. The board also reiterated its policy of considering the payment of special cash dividends on a quarterly basis.

Diamond Offshore, which is majority owned by Loews Corp. (L), had seen declining revenue over the past year as the offshore-drilling sector struggles with a recovery from 2010's Deepwater Horizon rig explosion in the Gulf of Mexico. U.S. authorities in February 2011 resumed the approval of deep-water drilling programs, which now face heightened scrutiny.

Diamond Offshore reported a profit of $155.7 million, or $1.12 a share, down from $188.5 million, or $1.36 a share, a year earlier. Revenue climbed 0.3% to $750.5 million.

Analysts polled by Thomson Reuters had most recently forecast earnings of $1.10 a share on revenue of $740 million.

Operating margin shrank to 26% from 29.2%.

Day rates for ultradeep-water floaters fell 2.2%, while utilization increased to 89% from 70% a year earlier.

For deep-water floaters, day rates dropped 12% while utilization fell to 85% from 97%.

Meanwhile, midwater floaters saw a 1.1% decline in day rates, with utilization improving to 70% from 60%.

Copyright (c) 2012 Dow Jones & Company, Inc.

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