Diamond Offshore Drilling Inc. Stock Upgraded (DO)

NEW YORK (TheStreet) -- Diamond Offshore Drilling (NYSE:DO) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

• The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Energy Equipment & Services industry average. The net income increased by 29.4% when compared to the same quarter one year prior, rising from $198.52 million to $256.85 million.
• The revenue growth significantly trails the industry average of 39.8%. Since the same quarter one year prior, revenues slightly increased by 9.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
• The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 4.75, which clearly demonstrates the ability to cover short-term cash needs.
• The gross profit margin for DIAMOND OFFSHRE DRILLING INC is rather high; currently it is at 53.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 29.20% significantly outperformed against the industry average.
• Net operating cash flow has increased to $355.50 million or 39.09% when compared to the same quarter last year. Despite an increase in cash flow, DIAMOND OFFSHRE DRILLING INC's cash flow growth rate is still lower than the industry average growth rate of 65.69%.

Diamond Offshore Drilling, Inc., together with its subsidiaries, operates as an offshore oil and gas drilling contractor worldwide. The company has a P/E ratio of 8.8, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are down 6.3% year to date as of the close of trading on Friday.

For more information on Diamond Offshore Drilling Inc. click any of the following:

• Diamond Offshore Drilling Inc. Stock Price

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• Diamond Offshore Drilling Inc. Key Stats & Profile

• Diamond Offshore Drilling Inc. Earnings

• Diamond Offshore Drilling Inc. Ratio Comparison

• Diamond Offshore Drilling Inc. Growth Rates

• Diamond Offshore Drilling Inc. Balance Sheet

• Diamond Offshore Drilling Inc. Cash Flow

• Diamond Offshore Drilling Inc. Income Statement