DO drills it

DO came through with a great earnings release
* Q4 revenue $578M, beating estimates by $15M or 2%+
* Q4 earnings $1.60 per share, beating estimates by almost 20%. They even beat the high estimate by 4%. Earnings grew over 100%

KEY HIGHLIGHTS
* Revenue up 57%
* Earnings up 100% (margins must be soaring
* Revenue growth is outpacing cost growth. Basically, demand for drill expertise is so high that labor costs are racing up.
* Prices increasing. The floaters now cost $30K more per day than last quarter (and utilization of 95%). Semi-submersibles up $27K per day. Compared to last year, these prices are up 70%.
* $4 one-time dividend

According to Reuters:
"Diamond Offshore also said it signed a letter of intent with an undisclosed customer to lease its Ocean Confidence rig for four years in the Gulf of Mexico for a maximum revenue of $730 million. The contract would begin in early 2008."

Remember, this company has 100% earnings growth and is still growing, but the P/E is only 17. The forward P/E is 9.

The recent selloff smells like a lot of market manipulation. I see $100 shortly, especially now that they have broken out of the $85 ceiling.