Back to top

Image: Bigstock

Transocean Q3 Earnings on Deck: What's in Store for the Stock?

Read MoreHide Full Article

Key Takeaways

  • Transocean will report Q3 earnings on Oct. 29, with estimates at $0.04 per share on $1.01B revenues.
  • The Ultra-Deepwater Floaters segment is projected to grow nearly 10% year over year to $733.9M.
  • Average utilization is estimated at 75%, up 11.1% from last year, though costs likely rose 1.5%.

Transocean Ltd. (RIG - Free Report) is set to release third-quarter results on Oct. 29. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 4 cents per share on revenues of $1.01 billion.

Let us delve into the factors that might have influenced the offshore driller’s performance in the to-be-reported quarter. But it is worth taking a look at RIG’s previous-quarter results first.

Highlights of RIG’s Q2 Earnings & Surprise History

The Switzerland-based rig supplier posted breakeven adjusted earnings per share for the second quarter of 2025, in contrast to the Zacks Consensus Estimate of a loss of 1 cent. This improvement can be attributed to a strong result from RIG's segments. The company’s total adjusted revenues of $988 million beat the Zacks Consensus Estimate of $968 million due to higher-than-expected revenues from ultra-deepwater and harsh environment floaters.

RIG’s earnings missed the Zacks Consensus Estimate in three of the trailing four quarters and beat the mark in one, delivering an average negative surprise of 195.83%.

This is depicted in the graph below: 

Transocean Ltd. Price and EPS Surprise

Transocean Ltd. Price and EPS Surprise

Transocean Ltd. price-eps-surprise | Transocean Ltd. Quote

Trend in RIG’s Estimate Revision

The Zacks Consensus Estimate for third-quarter 2025 earnings has witnessed no upward revision and a downward movement in the past seven days. The estimated figure compares with a break-even EPS from the year-ago period. The Zacks Consensus Estimate for revenues indicates a 6.19% increase from the year-ago period.

What Does Our Model Predict for RIG?

Transocean makes money by providing drilling services for oil and gas companies. It rents out specialized offshore drilling rigs, equipment and workers to help these companies drill wells in the ocean. The company operates a fleet of advanced drilling units, including ones designed for deepwater and rough conditions. Transocean earns revenues by charging customers (like big energy companies and governments) for the use of its rigs and services.

RIG’s revenues are likely to have improved in the quarter to be reported, attributed to the strong performance of its Ultra-Deepwater Floaters segment. For instance, the Ultra-Deepwater Floaters segment is expected to experience a substantial 9.9% year-over-year expansion, reaching a total of $733.9 million.

An increase in utilization rates further supports the company's positive outlook. Our estimate for average utilization in the third quarter is pegged at 75%, reflecting an 11.1% increase compared with the same period last year. Additionally, total rigs operating days are expected to have improved, with a 5.3% rise estimated for the third quarter compared with the year-ago period.

Adding to the bearish outlook, the increase in Transocean’s costs might have dented its to-be-reported bottom line. Going by our model, RIG’s total costs and expenses are likely to rise 1.5% year over year to $811.6 million in the third quarter. The upward cost trajectory could be attributed to the ongoing inflationary environment and tight labor market.

What Does Our Model Predict for RIG?

Our proven model predicts an earnings beat for Transocean this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

RIG’s Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is +31.58%.

RIG’s Zacks Rank: RIG currently carries a Zacks Rank #3.

Other Stocks to Consider

Transocean is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:

Cenovus Energy Inc. (CVE - Free Report) is scheduled to release earnings on Oct. 31, ahead of the market opening. This Calgary, AB-based integrated oil and gas company has an Earnings ESP of +1.27% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past four quarters, Cenovus’ earnings beat the Zacks Consensus Estimate twice and missed twice, resulting in an average surprise of 16.25%. Cenovus is valued at around $29.74 billion

Imperial Oil Limited (IMO - Free Report) is scheduled to release earnings on Oct. 31, before the market opens. This Calgary, AB-based integrated oil and gas company has an Earnings ESP of +12.12% and a Zacks Rank #3.

Imperial's earnings beat the Zacks Consensus Estimate in each of the past four quarters, leading to an average surprise of 14.88%. The company is currently valued at approximately $42.36 billion.

Comstock Resources, Inc. (CRK - Free Report) is slated to disclose its earnings on Nov. 3, after the market closes. This Frisco, TX-based oil and gas exploration and production company has an Earnings ESP of +2.86% and a Zacks Rank #3.

Comstock Resources’ earnings beat the Zacks Consensus Estimate in each of the past four quarters, leading to an average surprise of 187.67%. The company is currently valued at approximately $5.34 billion.

Published in