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Transocean (RIG) Up 10% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Transocean (RIG - Free Report) . Shares have added about 10% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Transocean due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Transocean Ltd. before we dive into how investors and analysts have reacted as of late.
Transocean Q3 Earnings & Sales Surpass Estimates
Transocean reported third-quarter 2025 adjusted earnings of 6 cents per share, beating the Zacks Consensus Estimate of 4 cents. The bottom line also improved from the year-ago period’s breakeven earnings. This improvement can be attributed to a strong third-quarter result from the company's segments.
This Switzerland-based offshore drilling powerhouse’s total adjusted revenues of $1 billion beat the Zacks Consensus Estimate by $21 million. The top line also increased 8.4% from the prior-year figure of $948 million. This was fueled by higher revenues associated with improved rig utilization, improved revenue efficiency and an increase in day rate for one rig. Ultra-deepwater and harsh environment revenues beat the consensus mark of $684 million and $265 million, respectively.
Segmental Revenue Breakup
Transocean’s ultra-deepwater floaters contributed 67.7% to net contract drilling revenues, while harsh environment floaters accounted for the remaining 32.3%.
Revenues from the ultra-deepwater and harsh environment floaters totaled $696 million and $332 million, respectively, compared with the year-ago quarter’s reported figures of $668 million and $280 million.
Revenues from ultra-deepwater operations were down from the model estimate of $733.9 million, while those from harsh environment operations exceeded the prediction of $269.1 million. Revenue efficiency was 97.5%, up from 96.6% in the previous quarter and also from 94.5% reported in the year-ago quarter.
Day Rates, Utilization & Backlog
Average day rates in the reported quarter increased to $462,300 from $436,800 in the year-ago quarter. However, the figure beat the Zacks Consensus Estimate of $450,000.
Average revenues per day from ultra-deepwater floaters increased to $460,200 from $426,700 in the year-ago quarter. The same from harsh environment floaters also increased to $467,100 from $464,900 in the prior-year quarter.
Fleet utilization rate was 76% in the quarter, which increased from the prior-year period’s 63.9%.
As of October 2025, Transocean’s total backlog was $6.7 billion.
Costs, Capex & Balance Sheet
Transocean reported $791 million in costs and expenses, which was 1.1% lower than the year-ago quarter’s level of $800 million. However, operations and maintenance costs increased to $584 million from $563 million a year ago.
The oil and gas drilling company spent $11 million on capital investments in the third quarter. Cash provided by operating activities was $246 million. Cash and cash equivalents were $833 million as of Sept. 30, 2025. Long-term debt amounted to $4.8 billion, with a debt-to-capitalization of 37.5% as of the same period.
Q4, 2025 & Preliminary 2026 Guidance
For the fourth quarter of 2025, the company expects contract drilling revenues between $1.03 billion and $1.05 billion, including $60 million to $70 million from additional services and reimbursable expenses. This outlook assumes a fleet-wide revenue efficiency of 96.5%. Operating and maintenance expenses are predicted to range from $595 million to $615 million. General and administrative expenses are expected to be between $45 million and $50 million.
Net cash interest expense is anticipated to be approximately $122 million, indicating $131 million in interest expense and $9 million in interest income. Capital expenditures are estimated at $25 million to $30 million and cash taxes paid are expected to total around $18 million.
For the full year 2025, the company expects that its total liquidity will be slightly more than $1.4 billion, which includes $510 million capacity of an undrawn credit facility. The remaining debt and capital lease balance is predicted at approximately $5.9 billion.
For the full year 2026, RIG’s preliminary contract drilling revenues are expected to be between $3.8 billion and $3.95 billion, which includes $230 million to $270 million from additional services and reimbursables. Operating and maintenance expenses are predicted at $2.275 billion to $2.4 billion, while G&A expenses are expected to range from $170 million to $180 million. RIG’s cash interest expense is anticipated to be about $480 million.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 25.71% due to these changes.
VGM Scores
At this time, Transocean has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Transocean has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Transocean is part of the Zacks Oil and Gas - Drilling industry. Over the past month, Noble Corporation PLC (NE - Free Report) , a stock from the same industry, has gained 2.8%. The company reported its results for the quarter ended September 2025 more than a month ago.
Noble Corporation PLC reported revenues of $798.02 million in the last reported quarter, representing a year-over-year change of -0.3%. EPS of $0.19 for the same period compares with $0.58 a year ago.
Noble Corporation PLC is expected to post earnings of $0.18 per share for the current quarter, representing a year-over-year change of -67.9%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Noble Corporation PLC has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Transocean (RIG) Up 10% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Transocean (RIG - Free Report) . Shares have added about 10% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Transocean due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Transocean Ltd. before we dive into how investors and analysts have reacted as of late.
Transocean Q3 Earnings & Sales Surpass Estimates
Transocean reported third-quarter 2025 adjusted earnings of 6 cents per share, beating the Zacks Consensus Estimate of 4 cents. The bottom line also improved from the year-ago period’s breakeven earnings. This improvement can be attributed to a strong third-quarter result from the company's segments.
This Switzerland-based offshore drilling powerhouse’s total adjusted revenues of $1 billion beat the Zacks Consensus Estimate by $21 million. The top line also increased 8.4% from the prior-year figure of $948 million. This was fueled by higher revenues associated with improved rig utilization, improved revenue efficiency and an increase in day rate for one rig. Ultra-deepwater and harsh environment revenues beat the consensus mark of $684 million and $265 million, respectively.
Segmental Revenue Breakup
Transocean’s ultra-deepwater floaters contributed 67.7% to net contract drilling revenues, while harsh environment floaters accounted for the remaining 32.3%.
Revenues from the ultra-deepwater and harsh environment floaters totaled $696 million and $332 million, respectively, compared with the year-ago quarter’s reported figures of $668 million and $280 million.
Revenues from ultra-deepwater operations were down from the model estimate of $733.9 million, while those from harsh environment operations exceeded the prediction of $269.1 million. Revenue efficiency was 97.5%, up from 96.6% in the previous quarter and also from 94.5% reported in the year-ago quarter.
Day Rates, Utilization & Backlog
Average day rates in the reported quarter increased to $462,300 from $436,800 in the year-ago quarter. However, the figure beat the Zacks Consensus Estimate of $450,000.
Average revenues per day from ultra-deepwater floaters increased to $460,200 from $426,700 in the year-ago quarter. The same from harsh environment floaters also increased to $467,100 from $464,900 in the prior-year quarter.
Fleet utilization rate was 76% in the quarter, which increased from the prior-year period’s 63.9%.
As of October 2025, Transocean’s total backlog was $6.7 billion.
Costs, Capex & Balance Sheet
Transocean reported $791 million in costs and expenses, which was 1.1% lower than the year-ago quarter’s level of $800 million. However, operations and maintenance costs increased to $584 million from $563 million a year ago.
The oil and gas drilling company spent $11 million on capital investments in the third quarter. Cash provided by operating activities was $246 million. Cash and cash equivalents were $833 million as of Sept. 30, 2025. Long-term debt amounted to $4.8 billion, with a debt-to-capitalization of 37.5% as of the same period.
Q4, 2025 & Preliminary 2026 Guidance
For the fourth quarter of 2025, the company expects contract drilling revenues between $1.03 billion and $1.05 billion, including $60 million to $70 million from additional services and reimbursable expenses. This outlook assumes a fleet-wide revenue efficiency of 96.5%. Operating and maintenance expenses are predicted to range from $595 million to $615 million. General and administrative expenses are expected to be between $45 million and $50 million.
Net cash interest expense is anticipated to be approximately $122 million, indicating $131 million in interest expense and $9 million in interest income. Capital expenditures are estimated at $25 million to $30 million and cash taxes paid are expected to total around $18 million.
For the full year 2025, the company expects that its total liquidity will be slightly more than $1.4 billion, which includes $510 million capacity of an undrawn credit facility. The remaining debt and capital lease balance is predicted at approximately $5.9 billion.
For the full year 2026, RIG’s preliminary contract drilling revenues are expected to be between $3.8 billion and $3.95 billion, which includes $230 million to $270 million from additional services and reimbursables. Operating and maintenance expenses are predicted at $2.275 billion to $2.4 billion, while G&A expenses are expected to range from $170 million to $180 million. RIG’s cash interest expense is anticipated to be about $480 million.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 25.71% due to these changes.
VGM Scores
At this time, Transocean has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Transocean has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Transocean is part of the Zacks Oil and Gas - Drilling industry. Over the past month, Noble Corporation PLC (NE - Free Report) , a stock from the same industry, has gained 2.8%. The company reported its results for the quarter ended September 2025 more than a month ago.
Noble Corporation PLC reported revenues of $798.02 million in the last reported quarter, representing a year-over-year change of -0.3%. EPS of $0.19 for the same period compares with $0.58 a year ago.
Noble Corporation PLC is expected to post earnings of $0.18 per share for the current quarter, representing a year-over-year change of -67.9%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Noble Corporation PLC has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.