Atwood Oceanics (NYSE:ATW), which is in the business of offshore drilling, has delivered strong results for the first nine months of FY15. However, from a peak of $35.35 in May 2015, the company’s stock has slumped to current levels of $19.4. This article discusses the reasons for this decline and my current view on the stock.
Before talking about the steep decline in the company’s stock, I would like to briefly discuss the company’s results for the first nine months of FY15. For nine months ended June 2015, Atwood Oceanics reported revenue of $1.0 billion as compared to revenue of $850 million for the nine months ended June 2014. For the same period, the company reported an operating cash flow of $484 million as compared to $339 million. Therefore, the results have been strong and this has been backed by continuing contracts for the company’s modern rig fleet. Continue Reading »