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NEW YORK (TheStreet) -- Shares of Seadrill (SDRL) were advancing 5.14% to $2.66 in early morning trading on Thursday after the company reported earnings that beat estimates for the 2016 second quarter.

Adjusted earnings per share were 59 cents for the quarter, which topped analysts' estimates of 41 cents.

The Bermuda-based offshore contract drilling company generated revenue of $868 million, which fell below Wall Street's projections of $890 million. Revenue was down 24.3% year-over-year from $1.15 billion.

The drop in revenue was due primarily to underperformances by Jack-up rigs and floaters.

Operating expenses for the quarter were $509 million vs. $694 million in 2015.

"There continues to be a significant supply overhang and the market conditions remain challenging, however, there is some volume returning to the spot market, although primarily for short term work," CEO Per Wullf said in a statement.

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"Our priorities for the remainder of the year continue to be delivering safe and efficient operations for our customers whilst concluding on our financing plans," Wullf added.

Additionally, crude oil (WTI) was down 0.21% to $46.67 per barrel this morning while Brent crude was falling 0.08% to $49.01 per barrel.

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

TheStreet Ratings rated this stock as a "sell" with a ratings score of D.

The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

You can view the full analysis from the report here: SDRL

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