Diamond Offshore Drilling Inc , one of the world's top-five offshore rig contractors, reported a 31 percent drop in quarterly profit as utilization rates fell.

Diamond, majority-owned by Loews Corp , said third-quarter net income fell to $178 million, or $1.28 per share, from $257 million, or $1.85 per share, a year earlier.

Revenue fell 17 percent to $729 million.

Utilization rates -- a ratio measuring the number of rigs being used as a percentage of a company's fleet -- of its deepwater rigs fell. (Reporting by Braden Reddall in San Francisco and Swetha Gopinath in Bangalore)