Diamond Offshore Drilling (DO), a provider of contract drilling services to the energy industry, has reported a 51.59 percent plunge in profit for the quarter ended Jun. 30, 2014, due to sharp drop in revenues and margins.
The company earned $89.71 million or $0.65 a share in the second-quarter compared with $185.33 million or $1.33 a share a year ago. Analysts on average had predicted net income of $0.60 a share.
Revenue during the second-quarter dipped 8.68 percent to $692.24 million from $758.02 million in the last year period.
Gross margin contracted by 1285 basis points over the last year period to 36.78 percent. Total expenses as a percentage of revenues increased to 80.68 percent from 65.32 percent in the same period last year. That has resulted in contraction of 1535 basis points in operating margins to 19.32 percent.
The company posted operating income of $133.77 million compared with $262.86 million in the previous year period.
''During the quarter, the first of our four newbuild drillships, the Ocean BlackHawk, commenced operations in the Gulf of Mexico,'' said Marc Edwards, president and chief executive officer. ''During 2014, Diamond Offshore will have added five very capable assets to its fleet, three new drillships and two semi-submersibles, with a fourth drillship to be delivered in early 2015.''
''We retain a strong credit rating and a healthy balance sheet,'' added Edwards. ''Diamond Offshore remains well positioned to navigate through the current market cycle.''
As on Jun. 30, 2014, the company's cash balance stood at $980.82 million, up $610.84 million from Jun. 30, 2013.
The company has witnessed a decline in long-term debt over the last one year. As on Jun. 30, 2014, long-term debt stood at $249.99 million, down 83.29 percent or $1246.20 million, from Jun. 30, 2013.
The company's total debt was 2.99 percent of total assets as on Jun. 30, 2014, compared with 20.46 percent on Jun. 30, 2013.
Interest coverage ratio, which determines how easily a company can pay interest expenses on outstanding debt, has declined to 7.22 from 33.06 in the same period last year.
Shares of Diamond Offshore Drilling declined $0.09 or 0.18 percent to settle at $50.04 on Wednesday.