We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Transocean (RIG) Stock Hardly Shifts Since Posting Wider Q3 Loss
Read MoreHide Full Article
Share price of Transocean Ltd. (RIG - Free Report) has shown no substantial change since third-quarter 2021 earnings announcement on Nov 1.
Despite the company’s ability to minimize its debt-to-capitalization, its shares failed to display an uptrend, primarily due to unpleasant bottom-line and top-line performances.
Behind the Earnings Headlines
Transocean reported an adjusted net loss of 19 cents per share for third-quarter 2021, wider than the Zacks Consensus Estimate of a loss of 16 cents and the year-ago period’s loss of 11 cents. This underperformance reflects lower utilization.
The offshore drilling powerhouse’s total revenues of $626 million fell short of the Zacks Consensus Estimate of $655 million. Also, the top line fell 19% from the year-earlier figure of $773 million.
Segmental Revenue Break-Up
Transocean’s Ultra-deepwater floaters contributed to 68.4% of the total contract drilling revenues while Harsh Environment floaters accounted for the remainder. In third-quarter 2021, revenues from Ultra-deepwater and Harsh Environment floaters totaled $428 million and $198 million, respectively, compared with the corresponding year-ago quarter’s reported figures of $490 million and $283 million.
Revenue efficiency was 98.1%, higher than 98% reported sequentially and higher than the year-ago value of 97%.
Average dayrates in the quarter rose to $367,100 from the year-ago level of $343,500. The company witnessed strong year-over-year average revenues per day from Harsh Environment floaters and Ultra-deepwater floaters. Overall, fleet utilization was 53% in the quarter, down from the prior-year period’s utilization rate of 65%.
Backlog
Transocean’s backlog record of $7.1 billion for October reflects a decline of $1.1 billion from the year-ago figure.
Costs, Capex & Balance Sheet
Operating and maintenance costs decreased to $398 million from $470 million a year ago. The company spent $37 million on capital investment in the third quarter. Cash provided by operating activities totaled $141 million. The company had cash and cash equivalents worth $900 million as of Sep 30, 2021. Long-term debt was $6.77 billion with debt-to-capitalization of 37.6% as of the same date, declining from the sequential quarter’s 38.2%.
Guidance
For the fourth quarter of 2021, this offshore drilling contractor expects adjusted contract drilling revenues of $670 million, indicating a decline from the sequentially reported figure of $683 million. It expects fourth-quarter operations and maintenance expenses of $403 million. Its G&A expenses are expected to be $46 million while capital expenditure including capitalized interest is estimated to be $96 million.
Image: Bigstock
Transocean (RIG) Stock Hardly Shifts Since Posting Wider Q3 Loss
Share price of Transocean Ltd. (RIG - Free Report) has shown no substantial change since third-quarter 2021 earnings announcement on Nov 1.
Despite the company’s ability to minimize its debt-to-capitalization, its shares failed to display an uptrend, primarily due to unpleasant bottom-line and top-line performances.
Behind the Earnings Headlines
Transocean reported an adjusted net loss of 19 cents per share for third-quarter 2021, wider than the Zacks Consensus Estimate of a loss of 16 cents and the year-ago period’s loss of 11 cents. This underperformance reflects lower utilization.
The offshore drilling powerhouse’s total revenues of $626 million fell short of the Zacks Consensus Estimate of $655 million. Also, the top line fell 19% from the year-earlier figure of $773 million.
Segmental Revenue Break-Up
Transocean’s Ultra-deepwater floaters contributed to 68.4% of the total contract drilling revenues while Harsh Environment floaters accounted for the remainder. In third-quarter 2021, revenues from Ultra-deepwater and Harsh Environment floaters totaled $428 million and $198 million, respectively, compared with the corresponding year-ago quarter’s reported figures of $490 million and $283 million.
Revenue efficiency was 98.1%, higher than 98% reported sequentially and higher than the year-ago value of 97%.
Transocean Ltd. Price, Consensus and EPS Surprise
Transocean Ltd. price-consensus-eps-surprise-chart | Transocean Ltd. Quote
Dayrates and Utilization
Average dayrates in the quarter rose to $367,100 from the year-ago level of $343,500. The company witnessed strong year-over-year average revenues per day from Harsh Environment floaters and Ultra-deepwater floaters. Overall, fleet utilization was 53% in the quarter, down from the prior-year period’s utilization rate of 65%.
Backlog
Transocean’s backlog record of $7.1 billion for October reflects a decline of $1.1 billion from the year-ago figure.
Costs, Capex & Balance Sheet
Operating and maintenance costs decreased to $398 million from $470 million a year ago. The company spent $37 million on capital investment in the third quarter. Cash provided by operating activities totaled $141 million. The company had cash and cash equivalents worth $900 million as of Sep 30, 2021. Long-term debt was $6.77 billion with debt-to-capitalization of 37.6% as of the same date, declining from the sequential quarter’s 38.2%.
Guidance
For the fourth quarter of 2021, this offshore drilling contractor expects adjusted contract drilling revenues of $670 million, indicating a decline from the sequentially reported figure of $683 million. It expects fourth-quarter operations and maintenance expenses of $403 million. Its G&A expenses are expected to be $46 million while capital expenditure including capitalized interest is estimated to be $96 million.
Zacks Rank & Stocks to Consider
Transocean currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy space are Denbury Inc. , Diamondback Energy, Inc. (FANG - Free Report) and APA Corporation (APA - 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.