Transocean, the world’s largest offshore drilling contractor and leading provider of drilling management services reported better than expected third quarter results Monday delivering a profit, rather than an expected loss.
Transocean, the world’s largest offshore drilling contractor and leading provider of drilling management services reported mixed fourth quarter results Monday with more revenue, but a larger than expected loss.
Transocean Ltd (NYSE: $RIG) Reported Earnings After Close Monday
($0.34) Missed $(0.24) EPS AND $748 Million Beat $734.6 Million Revenue Forecast
Earnings
Transocean reported fourth quarter earnings on Monday of a net loss attributable to controlling interest of $242 million, $0.48 per diluted share, compared with net loss attributable to controlling interest of $409 million, $0.88 per diluted share, in the third quarter of 2018; Adjusted net loss was $171 million, $0.34 per diluted share, excluding $71 million of net unfavorable items. This compares with adjusted net income of $30 million, $0.06 per diluted share, in the prior quarter.
The report missed consensus estimate for the quarter for a loss of 24 cents but beat on revenues of $734.6 million.Total contract drilling revenues were $748 million, compared with $816 million in the third quarter of 2018;
Transocean NYSE $RIG
Market Reaction After hours $8.95 +0.020 (+0.22%)
Highlights
“2018 will be remembered as a transformative year in Transocean’s long and storied history,” said President and Chief Executive Officer Jeremy Thigpen. “Through the acquisitions of Songa Offshore and Ocean Rig UDW, we added approximately $4.5 billion dollars of high margin backlog. And, when combined with our investment in a joint venture to market and operate the Transocean Norge, over the course of 2018, we added 21 rigs to our fleet, including 15 of the highest specification ultra-deepwater and harsh environment floaters in the industry.”
- Total contract drilling revenues were $748 million, compared with $816 million in the third quarter of 2018;
- Revenue efficiency(1) was 96%, compared with 95% in the prior quarter;
- Operating and maintenance expense was $497 million, compared with $447 million in the prior period;
- Adjusted normalized EBITDA margin was $260 million or 34%, compared with $341 million or 42% in the prior quarter;
- Cash flows from operating activities were $238 million, up from $214 million in the prior quarter
- In the fourth quarter, $RIG acquired Ocean Rig in a cash and stock transaction valued at approximately $2.5 billion;
- Contract backlog was $12.2 billion as of the February 2019 Fleet Status Report.
Transocean Q 3 Earnings Recap
$0.06 Beat $(0.09) EPS AND $816 Million Beat $777.91 Million Revenue Forecast
Earnings
Transocean reported third quarter earnings on Monday of EPS of $0.06, $0.15 better than the analyst estimate of ($0.09). Revenue for the quarter came in at $816 million versus the consensus estimate of $777.91 million. $RIG is still affected by reduced activity but continues to achieve higher revenue efficiency affecting contract drilling revenues.
Net loss attributable to controlling interest was $409 million, $0.88 per diluted share, compared with net loss attributable to controlling interest of $1.135 billion, $2.46 per diluted share, in the second quarter of 2018; Adjusted net income was $30 million, $0.06 per diluted share, excluding $439 million of net unfavorable items. This compares with adjusted net loss of $18 million, $0.04 per diluted share, in the prior quarter; Adjusted normalized EBITDA margin was $341 million or 42%, compared with $311 million or 40% in the prior quarter; This compares with adjusted net loss of $210 million, $0.48 per diluted share, in the prior quarter;
Transocean NYSE $RIG
Offshore drillers car
ried much of the brunt of the oil price collapse and glut. Transocean’s revenue and earnings rely on the top energy companies breakeven costs, capex and R&D. Costs are higher than for onshore drillers as such demand increases when oil prices are relatively higher.
In 2016, 28 of Transocean’s 57 rigs were either idle or completely mothballed. On the supply side, one should not look at the absolute number of the supply side.
The company has retired 31 rigs from its fleet over the course of the last two-and-a-half years.
Source:Transocean, AlphaStreet
llow_box” style=”text-align: center;”>Market Reaction After hours 10.73 +0.33 (+3.17%)
Highlights
- Total contract drilling revenues were $816 million, compared with $790 million in the second quarter of 2018;
- Revenue efficiency(1) was 95.2%, compared with 97.4% in the prior quarter;
- Operating and maintenance expense was $447 million, compared with $431 million in the prior period;
- Net loss attributable to controlling interest was $409 million, $0.88 per diluted share, compared with net loss attributable to controlling
- During the third quarter, the company entered into a definitive merger agreement under which Transocean agreed to acquire Ocean Rig in a cash and stock transaction valued at approximately $2.7 billion, including Ocean Rig’s net debt; and Contract backlog was $11.5 billion as of the October 2018 Fleet Status Report.
About Transocean
Transocean is a leading international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services, and believes that it operates one of the most versatile offshore drilling fleets in the world.
Transocean owns or has partial ownership interests in, and operates a fleet of 48 mobile offshore drilling units consisting of 31 ultra-deepwater floaters, 13 harsh environment floaters and four midwater floaters. In addition, Transocean is constructing four ultra-deepwater drillships and one harsh environment semisubmersible in which the company holds a 33.0% interest. For more information about Transocean, please visit: www.deepwater.com.
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