SeaDrill Limited (SDRL) : Earnings Whisper

SeaDrill Limited (SDRL) is expected to report second quarter 2015 earnings tomorrow before the open. The offshore drilling contractor is expected to report revenue of $1.18 billion. Similarly, the EPS is projected at $0.65. A year ago, SeaDrill Limited earned $1.29 a share. The Street’s estimates for the quarter reflect a year-over-year EPS and revenue decline of 50% and 3.3%, respectively. Meanwhile, reports a whisper number of $0.56 per share.

As a quick reminder, SDRL reported 1Q/15 EPS of $0.86, $0.23 better than the Street’s consensus estimate of $0.63. Revs rose 1.60% year-over-year to $1.24 billion from the $1.26 billion consensus.

SDRL is currently printing a higher than average trading volume with the issue trading 16 million shares, compared to the average daily volume of 13.17 million. The stock began trading this morning at $6.87 to currently trade 1.42% higher from the prior days close of $6.34. On an intraday basis it has gotten as low as $6.37 and as high as $6.92.

On valuation measures, SeaDrill Ltd. shares are priced at 2.33x this year’s forecasted earnings, compared to the industry’s 0.48x earnings multiple. The company’s current year and next year EPS growth estimates stand at (14.7%) and (17.6%) compared to the industry growth rates of (56.7%) and 28.00%, respectively. SDRL has a t-12 price-to-sales ratio of 0.66. EPS for the same period registers at $2.76.

SDRL shares have declined 23.43% in the last 4 weeks and declined 50.20% in the past three months. Over the past 5 trading sessions the stock has lost 18.61%.

Hamilton, Bermuda-based company, which is currently valued at $3.17 billion, has a median Wall Street price target of $10.00 with a high target of $19.84. SeaDrill Ltd. is down 82.36% year-over-year, compared with a 6.63% loss in the S&P 500.

The chart below shows where the equity has traded over the last 52 weeks.

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