Ocean Rig Sinks After Earnings

Ocean Rig UDW Inc ORIG reported mixed quarterly results Tuesday after market close, and subsequently has begun sinking in premarket trading Wednesday.

Prior to the release, earnings expectations were at $0.78 on the Street with analysts' consensus between $0.37 and $1.02 EPS. Revenue expectations were between $444.10 million and $518.00 million, with the average coming in at $481.15 million.

Q4 EPS came in at $(1.26), adjusted EBITDA at $300.8 million and sales of $475.727 million versus an estimated $481 million, profit came in at $78.8 million and revenue at $1.75 billion.

Related Link: Feb. 25: Rig UDW Posts Downbeat Q4 Earnings, But Revenue Beats Expectations

According to the company's report, the positives include a continuation of debt buybacks at discounted prices, decreased G&A costs compared to the year-ago figures, higher drilling expenses, 99.5 percent fleet utilization in Q4 and a new contract extension.

Negatives include a $174.4 million net loss, news that the company is likely to owe on an Ocean Rig Apollo related-loan, contract terminations and income drops from $499.4 million to $475.7 million for the quarter and comparative quarter last year.

Down more than 4 percent in premarket trading, Ocean Rig was down more than 10 percent shortly following the opening bell, trading around the $1.30 handle.

Seadrill Ltd SDRL is also seeing significant sell-offs, down roughly 9 percent in early morning trading, recently seen trading at $4.40.