Contract driller Diamond Offshore Drilling Inc. on Thursday said third-quarter earnings rose 17 percent as rising crude prices drove up demand from oil companies for more drilling services. As the economy showed signs of recovery in the third quarter, crude oil prices stabilized, trading as high as $76 per barrel, well above a 2009 low of $46.73 per barrel in February. Diamond Offshore's quarterly earnings climbed to $364.1 million, or $2.62 per share, from $310.5 million, or $2.23 per share, during the same period last year. Analysts polled by Thomson Reuters estimated a profit of $2.30 per share, on average. Revenue rose nearly one percent to $908.4 million, up from $900.4 million in the prior-year period. Analysts forecast revenue of $874.2 million.
They operate a pretty shareholder-friendly operation as well as earnings are returned to shareholders via a regular and special dividend. This is one of those stocks you'd be alright owning a few years, which is more than I can say about a lot of stocks right now. Loews also owns about 50% of DO, and buying their stock may be a cheaper way into DO if you like the rest of their businesses (which I'll leave for another day).
Anyway, good stuff from DO. I'd be a buyer of their stock anytime it pulls back (hint: just watch the price of crude).
Besides higher sales, profit was aided by lower contract drilling costs, foreign currency gains and reduced taxes.