There continues to be strong demand for drilling rigs across the board, which helped drive Seadrill (NYSE:SDRL) to another strong quarter. Third-quarter revenue rose 17.2% from a year ago to $1.28 billion, and net income was $215 million, or $0.61 per share. Wall Street was expecting $1.25 billion in revenue and earnings of $0.64 per share, so results were mixed versus expectations.  

Economic utilization of floaters was 94% and for jack-ups it was 97%, driving the growth in revenue. Seadrill's focus on the ultra-deepwater market, and high-specification jack-ups is proving to be a profitable strategy.

The earnings miss was due to higher operating expenses for new rigs and the consolidation of Sevan Drilling, another rig owner that Seadrill now owns a majority interest in. Investors should keep an eye on those expenses going forward because costs can be lumpy quarter to quarter. Keep in mind that revenue growth is even stronger than expected, and long term that's what will drive the bottom line higher.

Seadrill also announced a $0.04 increase in its quarterly dividend to $0.95 per share. This brings the current dividend yield to 8.9%, one of the highest on the market.

Fool contributor Travis Hoium manages an account that owns shares of Seadrill. The Motley Fool recommends Seadrill. The Motley Fool owns shares of Seadrill. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.