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Transocean (RIG) Posts Narrower-Than-Expected Loss in Q2
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Transocean Limited (RIG - Free Report) reported an adjusted loss of 4 cents per share in the second quarter of 2018, narrower than the Zacks Consensus Estimate of 17 cents. The improved results came on the back of higher-than-anticipated revenues from the Ultra-Deepwater floaters. Revenues from the Ultra-Deepwater Floaters came in at $470 million, comfortably surpassing the Zacks Consensus Estimate of $396 million.
However, the bottom line deteriorated from break-even earnings per share a year ago amid increased operational and general/administrative costs due to the acquisition of Songa Offshore and lower dayrates.
Revenues of $790 million topped the Zacks Consensus Estimate of $754 million on higher fleet utilization. The top line also increased 5.2% year over year on the back of higher contract drilling revenues from the Harsh-Environment floaters.
Transocean’s High-Specification floaters contributed about 91.4% to total contract drilling revenues, while Deepwater floaters, Midwater floaters, High-Specification Jackups accounted for the remainder. In the quarter under review, revenues from Ultra-Deepwater and Harsh Environment floaters totaled $470 million and $252 million, respectively.
Revenue efficiency in the quarter was 97.4%, reflecting an increase from the prior-quarter level of 91.5%. Revenue efficiency, however, remained unchanged from the year-ago quarter.
Transocean’s operating and maintenance expenses rose 30.2% to $431 million year over year. General and administrative expenses increased 48.6% from the year-ago figure to a total of $52 million.
In the second quarter of 2018, cash flow from operating activities came in at $3 million compared with $103 million and $319 million recorded in the first quarter of 2018 and second-quarter 2017, respectively. The sharp decline was on account of higher interest outgo.
Dayrates and Utilization
Compared with the second quarter of 2017, dayrates fell almost 17.4% in the quarter (from $329,000 to $308,300), unfavorably impacted by decline in the Midwater, Deepwater and Ultra Deepwater floaters.
However, overall fleet utilization was 57% during the quarter, up from the utilization rate of 44% and 52% recorded in the year-ago quarter and last reported quarter, respectively.
Backlog
Transocean’s strong backlog, which stands at $11.7 billion as of July 2018, reflects steady demand from customers. The backlog includes $405 million in new orders awarded during the quarter under review.
Capital Expenditure & Balance Sheet
Transocean spent $39 million on capital expenditure in the first quarter of 2018. As of Jun 30, 2018, Transocean had cash and cash equivalents of $2,506 million. Long-term debt of the company was $7,814 million, with a debt-to-capitalization ratio of 38.7%.
Zacks Rank & Key Picks
Currently, Transocean has a Zacks Rank #3 (Hold).
Some better-ranked players in the energy space are China Petroleum and Chemical Corporation , also known as Sinopec, ConocoPhillips (COP - Free Report) , and Marathon Oil corporation (MRO - Free Report) . While Sinopec sports a Zacks Rank #1 (Strong Buy), ConocoPhillips and Marathon Oil both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company delivered an average positive earnings surprise of 492.8% in the trailing four quarters.
ConocoPhillips, based in Houston, TX, is a major global exploration and production (E&P) company. It pulled off an average positive earnings surprise of 27.59% in the last four quarters.
Marathon Oil, a leading energy explorer, surpassed earnings estimates in three out of the trailing four quarters, with an average positive earnings surprise of 60.36%.
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Transocean (RIG) Posts Narrower-Than-Expected Loss in Q2
Transocean Limited (RIG - Free Report) reported an adjusted loss of 4 cents per share in the second quarter of 2018, narrower than the Zacks Consensus Estimate of 17 cents. The improved results came on the back of higher-than-anticipated revenues from the Ultra-Deepwater floaters. Revenues from the Ultra-Deepwater Floaters came in at $470 million, comfortably surpassing the Zacks Consensus Estimate of $396 million.
However, the bottom line deteriorated from break-even earnings per share a year ago amid increased operational and general/administrative costs due to the acquisition of Songa Offshore and lower dayrates.
Revenues of $790 million topped the Zacks Consensus Estimate of $754 million on higher fleet utilization. The top line also increased 5.2% year over year on the back of higher contract drilling revenues from the Harsh-Environment floaters.
Transocean’s High-Specification floaters contributed about 91.4% to total contract drilling revenues, while Deepwater floaters, Midwater floaters, High-Specification Jackups accounted for the remainder. In the quarter under review, revenues from Ultra-Deepwater and Harsh Environment floaters totaled $470 million and $252 million, respectively.
Revenue efficiency in the quarter was 97.4%, reflecting an increase from the prior-quarter level of 91.5%. Revenue efficiency, however, remained unchanged from the year-ago quarter.
Transocean Ltd. Price, Consensus and EPS Surprise
Transocean Ltd. Price, Consensus and EPS Surprise | Transocean Ltd. Quote
Costs
Transocean’s operating and maintenance expenses rose 30.2% to $431 million year over year. General and administrative expenses increased 48.6% from the year-ago figure to a total of $52 million.
In the second quarter of 2018, cash flow from operating activities came in at $3 million compared with $103 million and $319 million recorded in the first quarter of 2018 and second-quarter 2017, respectively. The sharp decline was on account of higher interest outgo.
Dayrates and Utilization
Compared with the second quarter of 2017, dayrates fell almost 17.4% in the quarter (from $329,000 to $308,300), unfavorably impacted by decline in the Midwater, Deepwater and Ultra Deepwater floaters.
However, overall fleet utilization was 57% during the quarter, up from the utilization rate of 44% and 52% recorded in the year-ago quarter and last reported quarter, respectively.
Backlog
Transocean’s strong backlog, which stands at $11.7 billion as of July 2018, reflects steady demand from customers. The backlog includes $405 million in new orders awarded during the quarter under review.
Capital Expenditure & Balance Sheet
Transocean spent $39 million on capital expenditure in the first quarter of 2018. As of Jun 30, 2018, Transocean had cash and cash equivalents of $2,506 million. Long-term debt of the company was $7,814 million, with a debt-to-capitalization ratio of 38.7%.
Zacks Rank & Key Picks
Currently, Transocean has a Zacks Rank #3 (Hold).
Some better-ranked players in the energy space are China Petroleum and Chemical Corporation , also known as Sinopec, ConocoPhillips (COP - Free Report) , and Marathon Oil corporation (MRO - Free Report) . While Sinopec sports a Zacks Rank #1 (Strong Buy), ConocoPhillips and Marathon Oil both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company delivered an average positive earnings surprise of 492.8% in the trailing four quarters.
ConocoPhillips, based in Houston, TX, is a major global exploration and production (E&P) company. It pulled off an average positive earnings surprise of 27.59% in the last four quarters.
Marathon Oil, a leading energy explorer, surpassed earnings estimates in three out of the trailing four quarters, with an average positive earnings surprise of 60.36%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>