Thursday, Diamond Offshore Drilling, Inc. (DO) reported a decline in profit for the fourth quarter, adversely impacted by increased tax expense, largely from the changing mix of domestic and international earnings during the year, foreign exchange differences . Revenues for the quarter also declined from last year, but came in ahead of Street estimates.
Diamond Offshore reported net income for the quarter that declined to $276.1 million or $1.98 per share from a net income of $293.3 million or $2.11 per share in the same period a year earlier.
On average, 30 analysts polled by Thomson Reuters expected the company to earn $2.32 per share. Analysts' estimates typically exclude special items.
Results for the fourth quarter were adversely impacted by increased tax expense, largely arising from the changing mix of domestic and international earnings during the year, foreign exchange differences which affected the amount of foreign tax credits that could be utilized and and in part, an assessment by Brazil related to operations in 2004 and 2005.
Additionally, results for the quarter were negatively impacted by net pre-tax bad debt expense primarily related to past-due receivables for a rig operating in Egypt. The company said that this was slightly offset by a net pre-tax gain that resulted from the sale of the jack-up rig Ocean Tower.
Revenues for the fourth quarter declined to $890.8 million from $903.2 million in the comparable period a year-ago. Twenty-two Wall Street analysts estimated a revenue of $889.66 million for the quarter.
Segment-wise, contract drilling revenues including revenues from high specification floaters, intermediate semisubmersibles and jack-ups declined to $872.13 million from $887.49 million a year-ago. Revenues related to reimbursable expenses increased to $18.65 million from $15.70 million a year-ago.
Total operating expenses for the quarter declined to $441.58 million from $447.12 million a year-ago. Expenses included contract drilling, reimbursable expenses, depreciation, general and administrative expenses, expenses towards bad debt, gain on disposition of assets and casualty loss.
The company's income tax expense for the quarter rose to $142.90 million from $109.71 million in the fourth quarter a year-ago.
Amongst others in the industry, Noble Corp. reported an increase in profit for its fourth quarter, primarily on cost control, as well as on improvement in revenues across all business segments.
Another competitor Helmerich & Payne, Inc. reported its fourth quarter profit fell 59% year-over year due to a significant drop in quarterly revenues amid sharply lower rig utilization across operating segments
For the full year, the company reported net income of $1.4 billion or $9.89 per share, compared with a net income of $1.3 billion or $9.42 per share for the year ended December 31, 2008. Revenues for the year were $3.6 billion, compared with $3.5 billion for 2008.
The Street expected the company to report earnings of $10.19 per share for the year, on revenues of $3.63 billion.
DO is currently trading on the New York Stock Exchange at $91.54, down $4.25 or 4.44%, on a volume of 0.715 million shares.
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