So, is business finally improving offshore? That has been the big question for almost three years, when the current severe offshore energy began. Based on a couple of earnings calls I listened to recently the answer is yes … and no.
Despite the continued weakness in the offshore drilling market, offshore driller Diamond Offshore reported third-quarter adjusted earnings of 25 cents a share.
However, during the company’s earnings call with analysts last month, Marc Edwards, president and chief executive officer, said they were still was not ready to call a bottom to the market since the “number of contract rollovers in the next 12 months exceeds new fixture opportunities currently in the pipeline.”
But on the positive side, he said the number of tenders had increased and customer inquiries have picked up. “Yet, contract durations for the most part remain short and pricing is very challenged.”
Gulf Island Fabrication, which operates three Louisiana shipyards, saw its stock rise slightly last month despite missing third-quarter earnings and revenue estimates.
Kirk Meche, president and CEO of the Houma, La., company, blamed the weak numbers on “underutilization” across all its divisions along with revised estimates to two of its complex projects at its shipyards division. This contributed to the company reporting a net loss of $3.1 million, or 21 cents a share, for the third quarter.
However, Meche told analysts during the company’s October earnings call that he was pleased to report significant improvements compared to last quarter. “Additionally, the backlog numbers continue to improve” with contract awards within the company’s services and shipyards divisions.
So, from this small sample of publicly traded offshore-related businesses, I’d say business was definitely improving … and getting worse.