Diamond Offshore 3Q Net Falls 31% on Lower Day Rates

Diamond Offshore Drilling Inc.'s third-quarter earnings fell 31% as the contract driller's revenue decline continued amid lower day rates.

Diamond Offshore, which is majority owned by Loews Corp., has seen declining revenue over the past year as the offshore-drilling sector struggles with a recovery from 2010's Deepwater Horizon rig explosion in the Gulf of Mexico. U.S. authorities in February 2011 resumed the approval of deepwater drilling programs, which now face heightened scrutiny.

Diamond Offshore reported a profit of $178.2 million, or $1.28 a share, down from $256.9 million, or $1.85 a share, a year earlier. Revenue dropped 17% to $729.1 million.

Analysts polled by Thomson Reuters most recently forecast earnings of $1.02 a share on revenue of $735 million.

Operating margin fell to 33.6% from 39.9%.

Day rates for ultra-deepwater floaters rose 5.4%, while utilization decreased to 75% from 88% a year earlier. For deepwater floaters, day rates dropped 20% and utilization fell to 95% from 99%.

Meanwhile, midwater floaters saw a 3.7% decline in day rates, with utilization improving to 71% from 70%.

Shares closed Wednesday at $69.77 and were inactive premarket. The stock is up 26% so far this year.