Shares of Transocean Ltd. ( RIG Quick Quote RIG - Free Report) have dropped 18% since second-quarter 2021 earnings announcement on Aug 2. Despite the company’s ability to minimize its debt-to-capitalization, sequentially, and its upbeat second-quarter contract drilling revenue guidance, which indicates growth from the sequential quarter’s reported figure, its shares declined primarily due to unpleasant bottom-line and top-line performances. Behind the Earnings Headlines Transocean reported an adjusted net loss of 18 cents per share for second-quarter 2021, wider than the Zacks Consensus Estimate of a loss of 15 cents. This underperformance reflects lower utilization. However, Transocean reported break-even earnings in the year-ago period on impressive revenue efficiency and higher dayrates. The offshore drilling powerhouse’s total revenues of $656 million fell short of the Zacks Consensus Estimate of $678 million. Also, the top line fell 29.5% from the year-earlier figure of $930 million. Segmental Revenue Break-Up Transocean’s Ultra-deepwater floaters contributed to 64.6% of the total contract drilling revenues while Harsh Environment floaters accounted for the remainder. In second-quarter 2021, revenues from Ultra-deepwater and Harsh Environment floaters totaled $424 million and $232 million, respectively, compared with the corresponding year-ago quarter’s reported figures of $636 million and $293 million. Revenue efficiency was 98%, higher than 97.4% reported sequentially and the year-ago value of 97.2%. Dayrates and Utilization Average dayrates in the quarter rose to $369,400 from the year-ago level of $307,800. The company witnessed strong year-over-year average revenues per day from Harsh Environment floaters and Ultra-deepwater floaters. Overall, fleet utilization was 55% in the quarter, down from the prior-year period’s utilization rate of 66%. Backlog Transocean’s backlog record of $7.3 billion for July reflects a decline of $1.6 billion from the year-ago figure. Costs, Capex & Balance Sheet Operating and maintenance costs decreased to $434 million from $525 million a year ago. The company spent $41 million on capital investment in the second quarter. Cash provided by operating activities totaled $153 million. The company had cash and cash equivalents worth $988 million as of Jun 30, 2021. Long-term debt was $6.99 billion with debt-to-capitalization of 38.2% as of the same date, declining from the sequential quarter’s 38.5%. Guidance For the third quarter of 2021, this offshore drilling contractor expects adjusted contract drilling revenues of $670 million, indicating growth from the sequentially reported figure of $656 million. It expects third-quarter operations and maintenance expenses of $427 million. Its G&A expenses are expected to be $40 million while capital expenditure including capitalized interest is estimated to be $90 million. Zacks Rank & Stocks to Consider Transocean currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the space are energy Devon Energy Corporation ( DVN Quick Quote DVN - Free Report) , Matador Resources Company ( MTDR Quick Quote MTDR - Free Report) and Continental Resources, Inc. ( CLR Quick Quote CLR - Free Report) , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here .