Yahoo Finance Transocean (RIG) Incurs Wider-Than-Expected Loss in Q4
Transocean, Inc. RIG reported an adjusted net loss of 49 cents per share in the fourth quarter of 2022. The figure was wider than the Zacks Consensus Estimate of a loss of 19 cents per share. This underperformance can be attributed to a decline in revenues from contract drilling.
Moreover, RIG’s bottom line declined from the year-ago period’s loss of 19 cents.
The offshore drilling powerhouse’s total adjusted revenues of $625 million missed the Zacks Consensus Estimate of $629 million.
However, adjusted revenues rose 1.7% from the year-ago figure of $615 million. This outperformance was primarily driven by higher operational days, higher recharge revenues, and strong bonus revenues.
Transocean Ltd. Price, Consensus and EPS Surprise
Transocean Ltd. price-consensus-eps-surprise-chart | Transocean Ltd. Quote
Segmental Revenue Breakup
Transocean’s Ultra-deepwater floaters contributed to 71.7% of the total contract drilling revenues. Harsh Environment floaters accounted for the remaining 28.3%.
In the fourth quarter of 2022, revenues from the Ultra-deepwater and Harsh Environment floaters totaled $434 million and $172 million, respectively, compared with the corresponding year-ago quarter’s reported figures of $432 million and $189 million.
Revenue efficiency for the reported quarter was 98%, higher than the year-ago value of 94.5% and the 95% reported sequentially.
Day Rates, Utilization & Backlog
As of February 2023, the contract backlog for Transocean is $8.5 billion.
Average day rates in the quarter were $348,600, down from the year-ago level of $352,500.
RIG’s average revenues per day from Harsh Environment floaters went from $387,700 to $357,900, indicating a a year-over-year decline. However, average revenues per day from Ultra-deepwater floaters increased to $344,800 from $337,100 in the year-ago quarter.
Total fleet average rig utilization was 49.4% in the quarter, down from the prior-year period’s figure of 53.4%.
Costs, Capex & Balance Sheet
Operating and maintenance costs decreased to $423 million from $430 million in the year-ago period.
In the fourth quarter of 2022, Transocean’s capital expenditures were $409 million, significantly higher than the year-ago period’s $87 million.
Cash provided by operating activities was $448 million at the end of 2022.
The company had cash and cash equivalents worth $683 million as of Dec 31, 2022. The long-term debt was $6.62 billion, with a debt-to-capitalization of around 38% as of Dec 31, 2022.
Guidance
For 2023, Transocean expects revenues in the $2.9-$3 billion range based on 96.5% revenue efficiency.
The company anticipates a capital expenditure (Capex) of $275 million and a maintenance Capex of $100 million.
Transocean anticipates $635 million in adjusted contract drilling revenues in the first quarter of 2023 and a nearly 15% increase in the number of offshore wells drilled in 2023.
Zacks Rank and Key Picks
Currently, Transocean carries a Zacks Rank #3 (Hold). Meanwhile, investors interested in the energy sector might look at stocks like NGL Energy Partners (NGL) sporting a Zacks Rank #1 (Strong Buy) and Energy Transfer ET and Halliburton (HAL) both holding a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
NGL Energy Partners is worth approximately $365.07 billion. Its shares have increased 28.7% in the past year.
NGL Energy Partners LP is a limited partnership company that operates a vertically-integrated propane business with three segments — retail propane, wholesale supply and marketing, and midstream.
Energy Transfer LP is valued at around $39.80 billion. ET delivered an average earnings surprise of 11.43% for the last four quarters, and its current dividend yield is 9.49%.
Energy Transfer LP currently has a forward P/E ratio of 8.93. In comparison, its industry has an average forward P/E of 10.40, which means Energy Transfer LP is trading at a discount to the group.
Halliburton is valued at around $33.44 billion. In the past year, HP stock has increased by 40.2%.
TX-based Halliburton Company, headquartered in Houston, is one of the largest oilfield service providers in the world with a trailing four-quarter earnings surprise of roughly 5.87%, on average.
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Transocean Ltd. (RIG) : Free Stock Analysis Report
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