Business is improving offshore, yes and no

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.

About the author

David Krapf

David Krapf has been editor of WorkBoat, the nation’s leading trade magazine for the inland and coastal waterways industry, since 1999. He is responsible for overseeing the editorial direction of the publication. Krapf has been in the publishing industry since 1987, beginning as a reporter and editor with daily and weekly newspapers in the Houston area. He also was the editor of a transportation industry daily in New Orleans before joining WorkBoat as a contributing editor in 1992. He has been covering the transportation industry since 1989. He has a degree in business administration from the State University of New York at Oswego, and also studied journalism at the University of Houston.

1 Comment

  1. William Corkern/Ahoy Propellers on

    Well I don’t know if the oil business will ever come back like it was 3 years ago. We are in the propeller manufacturing for the work boat market. The business has all but dried up in south Louisiana. If we had to rely on sales just in South LA we would be out of business. 2017 has to be the slowest yet for us. I thought we would get some help from politics but you know how that goes.

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