Seadrill Turns To Profit In Q4 - Quick Facts

(RTTNews) - Offshore drilling contractor Seadrill Ltd. (SDRL) said that its fourth-quarter of 2013 net income attributable to the parent was $231 million, compared to a loss of $21 million in the same quarter last year. Earnings per share was $0.49 versus a loss of $0.02 last year.

Net operating income was $568 million, up from $441 million last year.

Total operating revenues for the fourth quarter increased to $1.469 billion from $1.214 billion in the year ago quarter.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.77 per share and revenues of $1.41 billion for the quarter. Analysts' estimates typically exclude special items.

The Board has resolved to increase the regular quarterly dividend by 3 cents to $0.98 per share. The dividend increase reflected the improvement in operational results, solid orderbacklog and strong support received from the financing markets.

The company said that its board, as an indicative guideline, has decided to create an additional dividend capacity fund by preserving approximately 20% of any net proceeds from MLP dropdowns. The remaining 80% will be used for reduction of existing debt and future growth. The target will be to return these funds to shareholders over the twelve months following release of such funds.

Seadrill said it is currently trading at a yield of 10.4% based on an annual future dividend of $3.92 per share. In the current market, the Board sees limited value in increasing the current quarterly distribution beyond $0.98 per share.

The ex-dividend date has been set to March 5, 2014, record date is March 7, 2014 and payment date is on or about March 20, 2014.

The company said it is currently evaluating options which would allow it to both reconsolidate Seadrill Partners and continue to execute the financial model that has worked so successfully for both parties to date. It expects to conclude on the viability of these options shortly and will make a public announcement when the evaluation process is approved by the Board.

Seadrill's balance sheet will continue to improve supported by growing operating cash flow, monetization of non cash generating assets and dropdowns into Seadrill Partners. The results for second quarter 2014 and the rest of the year are expected to show year over year growth in excess of 20%.