SeaDrill Limited Q1 Earnings Excel - Analyst Blog

On May 28, 2014, Norwegian oilfield service firm, SeaDrill Limited SDRL reported strong first-quarter 2014 earnings. The key driver was the excellent performance by the Floaters segment.

Earnings per share came in at $6.23, breezing past the Zacks Consensus Estimate of 70 cents. The bottom line also increased significantly from the year-ago figure of 85 cents.

Total operating revenue of $1,221.0 million was down 3.5% from the first-quarter 2013 level. The top line also failed to beat the Zacks Consensus Estimate of $1,439.0 million. Lower contract revenue hampered the results.

Segmental Analysis

Floaters: This segment reported revenues of $787.0 million against $757.0 in the year-ago quarter. Net operating income of $784.0 million was also up from the year-ago figure of $317.0 million.

Jack-up Rigs: The segment registered revenues of $305.0 million compared with $256.0 million in the prior-year quarter. Net operating income of $103.0 million was, however, down 29.0% from $145.0 million recorded in the first quarter of 2013.

Tender Rigs: Operating profit of $3.0 million was down 97.0% from the prior-year profit of $90.0 million.

Backlog

On a consolidated basis, the total order backlog of SeaDrill Limited stands at $18.8 billion.

Expenses

SeaDrill Limited incurred operating expenses of $771.0 million in the reported quarter, reflecting a marginal decrease from the year-ago quarter.

Dividend

SeaDrill Limited declared quarterly cash dividend of $1.00, representing an increase of 2.0% from the dividend paid in the previous quarter. The dividend will be paid on Jun 19, 2014.

Capital Expenditure & Balance Sheet

As of Mar 31, 2014, SeaDrill Limited had cash and cash equivalents of $912.0 million and long-term debt of $12,390.0 million (including current portion). The debt-to-capitalization ratio was approximately 53.7%.

Zacks Rating

SeaDrill Limited currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at better-ranked players in the same industry like Pioneer Energy Services Corp. PES, Helmerich & Payne Inc. HP and Patterson-UTI Energy Inc. PTEN. Pioneer Energy sports a Zacks Rank #1 (Strong Buy), while Helmerich & Payne and Patterson-UTI carry a Zacks Rank #2 (Buy).

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