BNET Update: Monday, October 27, 2008

Even amidst declining energy prices and the uncertainty in the credit markets, Diamond Offshore Drilling (DO-$72.58) is signing deepwater rates in excess of $620,000 per day for its semi-submersible rigs.

In order to meet manufacturing targets for 2010 - 2013, Evergreen Solar (ESLR-$2.58) will need to improve operating efficiencies, expand capacity at the Devens facility, and build a planned new factory — which will require additional working capital.

Based on the current operating environment, Foundation Coal (FCL-$15.71) is cutting its full-year 2008 and 2009 EBITDA guidance to a range of $300 to $320 million and to $500 to $625 million, resulting from expected production constraints in its Eastern operations.

Despite the domestic and global economic downturn, Intuitive Surgical (ISRG-$158.68) increased top-line revenue forecast for 2008. The company now expects revenues to grow 49 percent to 50 percent over 2007 sales of $600.8 million, which is up from a previous estimate of 45 percent to 47 percent. However, management acknowledged sales could slow if customers have trouble securing capital.

The current economic environment could make for a challenging holiday shopping season for Mattel (MAT-$13.07). The world’s largest toy manufacturer expects borrowing difficulties are making it harder for the company’s retail distributors in Western Europe to acquire Christmas toy inventories.

Although Southwest Airlines’ (LUV-$10.97) fuel hedging program wiped-out operating income of $86 million in the third-quarter 2008, fuel derivative instruments have historically provided economic benefit to the company.

Against a backdrop of an 11 percent increase in rig count activity, Weatherford International (WFT-$12.98) reported third-quarter sales of $2.5 billion, up 29 percent from the same period last year. The company’s large North American onshore drilling presence, which comprised 46.4% of total sales, remains a potential liability in a deteriorating natural gas pricing environment. Nonetheless, going forward, pullback in drilling activity in both the US and Canada should be offset by a growing international footprint.

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.