The 10-second takeaway
For the quarter ended March 31 (Q1), SeaDrill beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly. Non-GAAP earnings per share stayed the same. GAAP earnings per share shrank slightly.
Margins dropped across the board.
SeaDrill logged revenue of $1.27 billion. The 22 analysts polled by S&P Capital IQ predicted revenue of $1.14 billion on the same basis. GAAP reported sales were 23% higher than the prior-year quarter's $1.03 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.68. The 14 earnings estimates compiled by S&P Capital IQ anticipated $0.58 per share. Non-GAAP EPS of $0.68 were the same as the prior-year quarter. GAAP EPS of $0.85 for Q1 were 2.3% lower than the prior-year quarter's $0.87 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 61.9%, 90 basis points worse than the prior-year quarter. Operating margin was 38.8%, 570 basis points worse than the prior-year quarter. Net margin was 32.3%, 830 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.13 billion. On the bottom line, the average EPS estimate is $0.60.
Next year's average estimate for revenue is $4.97 billion. The average EPS estimate is $2.76.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,032 members out of 1,042 rating the stock outperform, and 10 members rating it underperform. Among 211 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 209 give SeaDrill a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on SeaDrill is hold, with an average price target of $41.70.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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.