Tidewater posts quarterly loss, suspends dividend

Last week, Tidewater Inc. posted a third-quarter net loss for the period ended Dec. 31, 2015, of $19.5 million, 42 cents a share, on revenues of $218.2 million. For the same quarter in 2014, the net loss was $160.7 million, or $3.31 per share, on revenues of $387.6 million.

The previous quarter showed a net loss of $43.8 million, or 93 cents a share, on revenues of $271.9 million.

Included in the net loss for the December quarter was $15.1 million ($12.3 million after-tax, or $0.26 per share) in non-cash asset impairment charges that resulted from impairment reviews undertaken during the December 2015 quarter, and $4.1 million ($4.1 million after-tax, or $0.09 per share) of foreign exchange losses.

If you adjust Tidewater’s results for these after-tax charges, the loss was $3.1 million, or 7 cents a share. This beat consensus earnings estimates.

Before the earnings announcement, the New Orleans-based offshore service vessel operator Tidewater Inc. announced that it had suspended its quarterly dividend and common stock repurchase program.

The company said the moves were part of a broader plan of reducing costs and capital spending in order to preserve liquidity in a tough oilfield services market that has been hit hard by the steep drop in oil prices and cuts in global exploration and production spending.

Tidewater said that suspending the 25 cents per share quarterly dividend would save about $47 million a year.

Jeffrey M. Platt, Tidewater’s president and CEO, said during the company’s fiscal third-quarter earnings call last week “that given the challenges currently facing the oil service sector and the continuing uncertainty as to the severity and longevity of this downturn, it was prudent to further preserve our cash. Our financial priority remains strengthening our balance sheet and liquidity position as we navigate through this difficult market.”

Tidewater’s active vessel count at the end of the quarter was 215 vessels, down 14 vessels quarter-over-quarter. During the December quarter, the company stacked 23 previously active vessels and disposed of four stacked vessels. As a result, the stacked fleet during the December quarter averaged 56 vessels, and totaled 70 vessels on Dec. 31. That’s an increase of 19 vessels from the previous quarter. Vessel utilization was at 74%, down approximately 4%. Average day rates were approximately $14,600, up about 9% from the previous quarter.

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Ashley Herriman

Ashley Herriman is WorkBoat's online editor.

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