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There Were Some Weak Points in Seadrill's Earnings, but Investors Shouldn't Sweat It

Even the best company in a particular industry can get dragged down in a slow market, and Seadrill (NYSE: SDRL  ) is no exception. A lack of new contracts led to a decline in Seadrill's utilization rate below 90% for the first time in two years. But considering that it still has a 20 percentage point advantage over both Ensco (NYSE: ESV  ) and Transocean (NYSE: RIG  ) , it goes to show how strong the company is in relation to its competition. 

As Seadrill and the rest of the industry work through this down market, a few quarters of less than stellar performance can be expected. Long term, though, there is one thing that investors need to keep an eye on for the rest of this year. Find out what that is by tuning into the video below. 

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  • Report this Comment On June 01, 2014, at 6:04 PM, MarioCarbone wrote:

    What to say, after all this words aroun about SDRL.

    Maybe we look at him really to much in details and then we found in every company glithches.

    However ee look to SDRL it has better with 7 E/P then 90% of the listed companies on NYSE and it gives better dividend with yield 10,5 % then 90% others either.

    The industry in which it work is risky as any other and market is not given to anybody forever.

    If you want to grow and modernize you have to invest and to have debt, however with debt/EBITDA around 3 company can repay its assets that has depreciation period 30and more years.

    SDRL primary power comes from capability that can serve custumer and regions that others can't (ultradeep, arctic) in which there are some most perspective reserves on the world. With price that is lower of the price of onshore drilling.

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Tyler Crowe

Energy and materials columnist for

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Related Tickers

9/4/2015 12:31 PM
ESV $15.53 Down -0.76 -4.67%
Ensco CAPS Rating: ****
RIG $13.35 Down -0.04 -0.26%
Transocean CAPS Rating: ***
SDRL $7.02 Down -0.24 -3.31%
Seadrill CAPS Rating: ****