Bitcoin sets a new all-time high above $6,000 >>> READ MORE

Seadrill Q1 Profits Sink 53%

Last year's results benefited from a big asset sale


Oil-services giant Seadrill (NYSE:SDRL) reported first-quarter profits of $416 million (87 cents per share) compared to last year’s profit of $879 million ($1.83 per share), a drop of 53%. The previous year’s results were bolstered from a $540 million gain tied to the Seawell sale. Revenues of  about $1.05 billion fell about 5% from last year’s results, but came in ahead of analysts’ estimates of $1.03 billion.

Seadrill, which focuses on deepwater drilling but also operates a diverse set of rigs, reported profits of $318 million on its “floaters” business.

High Oil Prices: The Truth About A Misguided Witch Hunt
High Oil Prices: The Truth About A Misguided Witch Hunt

The company also announced several major equipment purchases as well as new contracts with a total revenue potential of $870 million.

Seadrill CEO Alf Thorkildsen said in a press release that the company’s solid first-quarter results reflect “a strong underlying operational performance.”

“These strong fundamentals support the expectation of continued strength in all sectors of the contract drilling industry for the foreseeable future. As a consequence we have ordered six new builds in the last three months and the company now has 18 drilling units under construction,” Thorkildsen continued. “We remain bullish on the outlook for drilling services, in particular related to the demand for high-specification equipment.”

The company also increased its quarterly cash dividend by 2.5% to 82 cents per share.

In other related news, Norwegian oil company Statoil (NYSE:STO) today announced an agreement with Seadrill to use the company’s West Aquarius deepwater drilling rig for oil and gas exploration offshore Newfoundland in 2012 and 2013.

SDRL dropped about 1.5% to $36.07 in Monday morning trading, but shares are up about 8.3% since  January.

Article printed from InvestorPlace Media,

©2017 InvestorPlace Media, LLC