Seadrill Q3 Profit Up 51%, Revenues Beat View; Lifts Dividend

(RTTNews) - Offshore drilling contractor Seadrill Ltd. (SDRL) on Monday reported a 51 percent increase in profit for the third quarter from last year on higher revenues that beat analysts' expectations.

Looking ahead to the fourth quarter, Seadrill forecasts EBITDA growth in excess of 15 percent compared to the third quarter. In addition, the company's board of directors increased the quarterly dividend by $0.04. However, Seadrill's shares are down almost 2 percent in pre-market trades.

Seadrill's net income for the third quarter was $286 million or $0.60 per share, up from $189 million or $0.40 per share in the year-ago period. On average, fifteen analysts polled by Thomson Reuters expected the company to report earnings of $0.68 per share for the quarter. Analysts' estimates typically exclude special items.

Total operating revenues for the quarter grew 17 percent to $1.28 billion from $1.09 billion in the prior-year period. Analysts had a consensus revenue estimate of $1.26 billion for the quarter.

Contract revenues for the quarter rose 12 percent from last year to $1.19 billion.

The latest quarter's results include loss on derivative financial instruments of $5 million, compared to gain of $20 million in the same period last year.

The company's total order backlog as at November 22 was $19.5 billion, excluding PEMEX Heads of Agreement and West Aquarius extension.

Seadrill's board of directors has resolved to increase the regular quarterly dividend by $0.04 to $0.95 per share. The ex-dividend date has been set to December 3, 2013, record date is December 5, 2013 and payment date is on or about December 20, 2013.

The board said it believes the new dividend is sustainable long-term and can be further increased as EBITDA is expected to grow significantly over the next eight quarters.

Looking ahead to the fourth quarter, Seadrill forecasts EBITDA growth in excess of 15 percent compared to the third quarter, based on the performance so far and with a solid operation for the remainder of the quarter.

For fiscal 2016, Seadrill expects to achieve a fully consolidated annualized EBITDA of $4.5 billion, assuming current market rates.

SDRL closed Friday's trading at $45.24. In Monday's pre-market trades, the stock is down $0.79 or 1.75 percent to $44.42.