Diamond Offshore Drilling Inc. (NYSE: DO) reported third-quarter 2015 results before markets opened on Monday. The offshore drill rig operator posted diluted earnings per share (EPS) of $0.99 and revenues of $609.75 million. In the third quarter of 2014, the company reported EPS of $0.38 on revenues of $737.68 million. Thomson Reuters had estimates for EPS of $0.60 and $594.55 million in revenue.

Diamond is controlled by Loews Corp. (NYSE: L) and has had a pretty rough two-and-a-half year run. In mid-July of 2013, shares were trading at around $72.50. By the end of 2013, the stock traded at around $56.50 and dropped another 35% to around $37 by the end of 2014. The stock closed at $19.88 on Friday.

Company president and CEO Marc Edwards said:

I am pleased with our solid third quarter results, which demonstrate Diamond Offshore’s ability to execute on managing our costs and controlling downtime. During the quarter, our three newbuild drillships delivered operational efficiency of 99.3 percent, which directly benefits our topline and improves project economics for our clients.

Third-quarter operating expenses fell from $677.27 million in the year-ago third quarter to $428.31 million. More than $100 million of the savings came from an asset impairment of $2.55 million this year, compared with $109.46 million a year ago. Absent the impairment charge, operating income in the third quarter of last year would have totaled about $200 million, compared with about $184 million excluding impairment charges this year.

Diamond reached an agreement with Petrobras to terminate contracts for one semisubmersible rig and one drillship in exchange for an additional 875 days of contract term on another semisubmersible that extends the contract term on that rig until mid-2020. At a day-rate of $380,000, the contract extension added $333 million to Diamond’s backlog. The idled semisubmersible will be cold-stacked (stored) and the drillship will be retired and scrapped.

Investors liked what they heard and have sent the shares to trade higher in Monday’s premarket by about 4.6%, at $20.80 in a 52-week range of $16.51 to $40.00. The consensus price target on the stock is $18.96.

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