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What: Shares of Atwood Oceanics (NYSE:ATW) jumped more than 10% on Tuesday after the company reported its fiscal fourth-quarter results. The offshore driller's revenue and earnings grew sharply, despite the impact lower oil prices are having on drilling activity.

So what: Atwood Oceanics reported revenue of $363.2 million, which was up 9.9% sequentially and 12.3% year over year. Driving this strong revenue growth was the company's ultra-deepwater drilling fleet, which delivered $197 million in revenue during the quarter, which is up 13.2% from last quarter and 43.8% year over year.

Earnings, likewise, were up strongly. The company reported net income of $150 million, or $2.32 per share. That's well above last quarter's net income of $113 million, or $1.73 per share, as well as the year-ago quarter when net income was $112.2 million, or $1.72 per share. While the higher revenue helped, lower costs were the biggest factor in the improved earnings, especially costs within the ultra-deepwater unit, which fell from $75 million last quarter to just $58 million during the current quarter.

Keeping costs at bay played a big role in driving earnings this quarter for offshore drillers. Noble (NYSE:NE) was a prime example. While Noble reported a 7.9% increase in revenue, its contract drilling expenses fell 24% and general and administrative expenses dropped 38%. Because of that, Noble's operating income jumped 68% year over year while earnings per share skyrocketed 169%.

Now what: This focus on reducing costs will continue to be vital for Atwood and its peers given the currently weak environment in the offshore industry. That weakness could cause revenue to decline in 2016 due to rigs coming off contract and either being recontracted at lower dayrates or being idled until industry activity levels start to pick up. By continuing to push its costs lower, the company will be able to mitigate some of the expected impact that lower revenue would have on earnings. 

Matt DiLallo has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Atwood Oceanics. 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.