Another Subpar Performance by Pride

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So far this earnings season, we've heard from offshore drillers Ensco (NYSE: ESV), which is down but not out, and Noble Corp. (NYSE: NE), which is ready for anything. My Foolish colleague David Lee Smith covered the results of Diamond Offshore (NYSE: DO), a deepwater stock he said you shouldn't miss.

Those three drillers make my Deepwater Dean's List. Their drilling margins lead peers by a wide margin. Routinely falling short on this measure is Pride International (NYSE: PDE), which reported quarterly results yesterday. Let's see what the B-lister had to say for itself this time around.

Pride's transformation toward a purer deepwater focus is going swimmingly, thanks to the successful spinoff of Seahawk Drilling (Nasdaq: HAWK). More than 75% of the company's quarterly EBITDA (excluding corporate and other items) came from the company's deepwater and midwater segments. Both registered substantial sequential declines, however, on account of much lower utilization rates.

The deepwater segment saw the Pride North America hit the shipyard for a planned maintenance and upgrade program in the middle of its multiyear stint for BP in Egypt. The Pride South Pacific likewise took a breather before beginning its cut-rate contract with Noble Energy (NYSE: NBL) in West Africa. The Pride Carlos Walter, working for Petrobras in Brazil, also experienced some unexpected repair downtime.

We already know that the midwater market is struggling, based on our review of Transocean's (NYSE: RIG) last fleet status update. Pride's now got two of its six midwater floaters uncontracted, with no expectation of sending them back into action before mid-2010.

The fourth quarter promises more of the same, at least in terms of planned mobilization and shipyard downtime. The company expects this to represent a trough quarter, with better times in store for 2010 and beyond.

This pattern has been going on for years now: heavy shipyard time, low utilization, brighter days ahead. I prefer drillers that have been performing at a high level for years on end, but maybe that's just a funny quirk of mine.

Motley Fool CAPS players are plenty excited about Pride's prospects, rating the company a tippy-top five stars. What's your take?