Transocean Reports Sharply Lower Quarterly Profit, Revenue

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 [e-mail]

(END) Dow Jones Newswires

November 02, 2016 18:05 ET (22:05 GMT)

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