Diamond Offshore Drilling Inc. (NYSE: DO) reported second-quarter 2016 results before markets opened on Monday. The offshore drill rig operator posted adjusted diluted earnings per share (EPS) of $0.16 and revenues of $388.75 million. In the second quarter of 2015, the company reported EPS of $0.64 on revenues of $470.54 million. Thomson Reuters has a mean estimate for EPS of $0.04 and revenues of $374.17 million.
Diamond is controlled by Loews Corp. (NYSE: L), which itself reported Monday morning adjusted EPS of $0.60 for the second quarter. The commercial property and casualty insurance company also posted revenue of $3.31 billion in the period.
On a GAAP basis, Diamond lost $4.30 per share, primarily due to $678.15 million in impairment charges related to the carrying value of eight semi-submersible rigs and their associated inventory. The company cold-stacked (mothballed) two rigs during the quarter and said it intends to scrap two more.
President and Chief Executive Officer Marc Edwards said:
Although the market continues to be challenged, our focus is on striking a balance between controlling costs and laying the foundation to ensure Diamond Offshore is well positioned for the recovery.
Second-quarter operating expenses doubled from $499.9 million last year to $1.02 billion, entirely due to the impairment charge.
As of June 30, 2016, Diamond’s total contracted backlog was $4.4 billion, representing 28 rig years of work. Approximately 86% of the company’s available ultra-deepwater rig days for the remainder of 2016 are contracted.
Shares were up 1.2% in Monday’s premarket to $23.00. The stock’s 52-week range is $14.18 to $26.72, but the consensus 12-month price target is just $21.41.