SDRL experienced a dramatic financial deterioration with net income swinging from $446M profit to $77M loss and operating cash flow turning deeply negative.
The company's financial performance collapsed year-over-year, with net income declining 117% and operating cash flow swinging from positive $88M to negative $28M, indicating severe operational challenges. While the fleet composition remained stable at 15 units, the reduction from 11 to 10 operating units suggests utilization pressures that likely contributed to the poor financial performance.
SDRL's financials show a complete reversal of fortune, with profitability evaporating as net income fell from $446M to a $77M loss while operating income crashed 89% to just $47M. Cash flow deteriorated even more severely, swinging from $88M positive to $28M negative in operating cash flow, while cash reserves declined 29% to $339M. The overall picture signals a company in financial distress, burning cash and struggling to generate returns despite maintaining a similar fleet size, suggesting fundamental operational or market challenges that investors should view as a significant red flag.
Operating cash flow fell 131.8% — earnings quality concerns; investigate working capital changes and non-cash items.
Net income declined 117.3% — review whether driven by operations, interest costs, or non-recurring items.
Operating income deteriorated sharply — investigate whether driven by one-time charges or structural cost issues.
Cash decreased 29.1% — monitor burn rate and upcoming capital needs.
Current liabilities reduced — improved short-term financial position and working capital health.
Current assets declined 18.3% — monitor working capital adequacy and short-term liquidity.
Receivables declined — improved collection efficiency or conservative revenue recognition.
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