Transocean Reports Sharply Lower Quarterly Profit, Revenue
November 02 2016 - 6:20PM
Dow Jones News
Oil driller Transocean Ltd.'s quarterly profit dropped sharply
again as revenue was nearly halved amid an oil rut that has
devastated the sector.
Still, the quarterly results beat expectations, driving up its
beaten-down stock by 1.2% to $9.40 in after-hours trading.
The Switzerland-based company, which boasts the world's largest
fleet of offshore drilling rigs, spent billions of dollars to
expand its fleet right before oil prices collapsed.
Over all, Transocean's third-quarter profit fell 26% to $244
million, or 62 cents a share. Excluding certain items, profit fell
to 25 cents a share from 87 cents a share a year earlier, but ahead
of the 17 cents in the previous quarter.
Revenue declined to $903 million, a 44% drop from a year earlier
and 4% from the previous quarter. It marks the second straight
quarter that Transocean's revenue fell below the billion-dollar
mark. Meanwhile, expenses fell 41% to $668 million.
Analysts surveyed by Thomson Reuters had projected 14 cents a
share on $861.9 million in revenue.
Rig utilization was 49%, up from 47% in the previous quarter but
sharply down from the 70% Transocean reported in the year-ago
period.
Contract backlog, meanwhile, stood at $12.2 billion as of the
October fleet report, down from $13.7 billion in July. The bulk of
the backlog is in the ultra-deepwater, Chief Executive Jeremy D.
Thigpen said in September at a trade conference sponsored by
Barclays.
Mr. Thigpen said at the time that he expects the market to turn
around in the second half of next year and "lead to something
material" in 2018 with utilization and day rates picking up in
2019.
Transocean ended the quarter with $2.53 billion in cash and
$8.26 in debt.
The merger with Transocean Partners, the master limited
partnership it had formed in 2014, is expected to close in the
fourth quarter. Transocean is counting on the deal to shore up its
liquidity.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
November 02, 2016 18:05 ET (22:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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