Seadrill Reports Impressive Earnings Surprise Amid Market Challenges
Strong Quarterly Performance Outshines Expectations
Seadrill (SDRL) announced quarterly earnings of $0.49 per share, greatly exceeding the Zacks Consensus Estimate of $0.05 per share. In comparison, the company reported earnings of $1.10 per share a year ago. These numbers have been adjusted for non-recurring items.
This quarterly performance marked an astonishing earnings surprise of 880%. In the previous quarter, the offshore drilling services provider was expected to report earnings of $0.58 per share but delivered $0.59, resulting in a surprise of 1.72%.
Consistent Outperformance in Earnings
Over the past four quarters, Seadrill has consistently surpassed consensus EPS estimates, achieving this feat each time. The company, part of the Zacks Oil and Gas – Drilling industry, generated revenues of $354 million for the quarter ending September 2024, exceeding the Zacks Consensus Estimate by 5.05%. This is a decrease from $414 million in revenues from the same period last year. Similarly, Seadrill has topped consensus revenue estimates four times over the last year.
What Lies Ahead for Seadrill?
Despite the strong quarterly performance, potential investors are left pondering the future of Seadrill’s stock. One critical factor to consider is the company’s earnings outlook, which reflects current consensus earnings expectations for the upcoming quarters and any recent changes to those expectations.
Research shows a strong link between short-term stock movements and changes in earnings estimate revisions. Investors can monitor these revisions independently or utilize tools like the Zacks Rank, a system known for its accuracy in forecasting stock movements based on earnings estimates.
Prior to this earnings announcement, the estimate revisions trend for Seadrill appeared unfavorable. Although the recent earnings report may prompt shifts in estimates, the current outlook results in a Zacks Rank #5 (Strong Sell) for the stock, suggesting it may underperform the market in the near term. Investors can explore other Zacks #1 Rank (Strong Buy) stocks for potentially better opportunities.
Key Earnings Estimates to Watch
How estimates will evolve in the coming days will be intriguing to watch. The current consensus EPS estimate stands at -$0.57 on revenues of $270 million for the next quarter and $1.26 on revenues of $1.35 billion for the full fiscal year.
It is also important to note that industry outlooks can significantly affect stock performance. Currently, the Oil and Gas – Drilling industry ranks in the bottom 8% of over 250 Zacks industries. Historical data indicates that the top half of Zacks-ranked industries tends to outperform the bottom half by a ratio of more than 2 to 1.
INPLAY OIL CP’s Upcoming Report
Another player in the Zacks Oils-Energy sector, INPLAY OIL CP (IPOOF), has yet to release its results for the quarter ending September 2024. This company is projected to report quarterly earnings of $0.03 per share, representing a 50% decline compared to the previous year. Additionally, the consensus EPS estimate has remained unchanged for the last month. Revenue forecasts for INPLAY OIL CP are expected to be $28.95 million, down 16.8% from the year-ago period.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
