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Offshore drilling giant Transocean Ltd. (RIG - Free Report) reported better-than-expected second-quarter 2016 results owing to contribution from its newbuild, ultra-deepwater drillships Deepwater Proteus and Deepwater Thalassa. The outperformance was offset partially by a lower fleet utilization rate and significant increase in operating and maintenance expenses.
Earnings per share (excluding special items) came in 17 cents against the Zacks Consensus Estimate of a loss of 1 cent. However, the bottom line decreased from the year-ago adjusted earnings of $1.11 per share.
Quarterly total revenue of $943 million beat the Zacks Consensus Estimate of $914.4 million. The top line, however, decreased from the year-ago quarter figure of $1,884 million.
Transocean's high-spec floaters contributed about 75% to the total revenue, while mid-water floaters and high-spec jackup rigs accounted for approximately 14.1% and 7.8%, respectively. The remaining was generated from rig activities, integrated services and others.
Operating Statistics
Transocean’s operating income came in at $154 million, down from $506 million profit in second-quarter 2015. The underperformance was negated partially by the contribution from the company’s newbuild, ultra-deepwater drillships Deepwater Proteus and Deepwater Thalassa. Resumption of activities by harsh-environment floater Henry Goodrich also added to the positives.
Most importantly, total operating and maintenance expenses increased 153.8% year over year to $500 million.
Dayrates and Utilization
Total average dayrates decreased to $353,700 in the quarter under review from $399,700 in the year-earlier quarter. Significantly lower dayrates from all the floaters led to the decline.
Overall fleet utilization was 47%, down from the year-ago utilization rate of 75%.
Capital Expenditure & Balance Sheet
Capital expenditures during the quarter totaled $458 million. As of Jun 30, 2016, Transocean had cash and cash equivalents of $2,153 million and long-term debt of $7,155 million (representing a debt-to-capitalization ratio of approximately 35.2%).
Other News
On Aug 1, 2016, Transocean declared its intent to purchase all the outstanding common units of Transocean Partners LLC that are now not owned by the company. For the purchase, Transocean will pay 1.1427 of its shares for each common unit of the partnership.
Switzerland-based Transocean currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector include Enbridge Inc. (ENB - Free Report) and North Atlantic Drilling Limited . Both players sport a Zacks Rank #1 (Strong Buy).
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Transocean (RIG) Posts Better-than-Expected Q2 Earnings
Offshore drilling giant Transocean Ltd. (RIG - Free Report) reported better-than-expected second-quarter 2016 results owing to contribution from its newbuild, ultra-deepwater drillships Deepwater Proteus and Deepwater Thalassa. The outperformance was offset partially by a lower fleet utilization rate and significant increase in operating and maintenance expenses.
Earnings per share (excluding special items) came in 17 cents against the Zacks Consensus Estimate of a loss of 1 cent. However, the bottom line decreased from the year-ago adjusted earnings of $1.11 per share.
Quarterly total revenue of $943 million beat the Zacks Consensus Estimate of $914.4 million. The top line, however, decreased from the year-ago quarter figure of $1,884 million.
Transocean's high-spec floaters contributed about 75% to the total revenue, while mid-water floaters and high-spec jackup rigs accounted for approximately 14.1% and 7.8%, respectively. The remaining was generated from rig activities, integrated services and others.
Operating Statistics
Transocean’s operating income came in at $154 million, down from $506 million profit in second-quarter 2015. The underperformance was negated partially by the contribution from the company’s newbuild, ultra-deepwater drillships Deepwater Proteus and Deepwater Thalassa. Resumption of activities by harsh-environment floater Henry Goodrich also added to the positives.
Most importantly, total operating and maintenance expenses increased 153.8% year over year to $500 million.
Dayrates and Utilization
Total average dayrates decreased to $353,700 in the quarter under review from $399,700 in the year-earlier quarter. Significantly lower dayrates from all the floaters led to the decline.
Overall fleet utilization was 47%, down from the year-ago utilization rate of 75%.
Capital Expenditure & Balance Sheet
Capital expenditures during the quarter totaled $458 million. As of Jun 30, 2016, Transocean had cash and cash equivalents of $2,153 million and long-term debt of $7,155 million (representing a debt-to-capitalization ratio of approximately 35.2%).
Other News
On Aug 1, 2016, Transocean declared its intent to purchase all the outstanding common units of Transocean Partners LLC that are now not owned by the company. For the purchase, Transocean will pay 1.1427 of its shares for each common unit of the partnership.
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Zacks Rank
Switzerland-based Transocean currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector include Enbridge Inc. (ENB - Free Report) and North Atlantic Drilling Limited . Both players sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>