Transocean 4th-Quarter Net Down 49% on Higher Costs

Transocean Ltd.'s fourth-quarter profit fell 49% as the offshore oil driller reported higher costs and a decline in fleet utilization.

The quarterly results are the first since Transocean, the world's largest offshore drilling contractor, in November detailed a plan to put some of its drilling rigs into a master limited partnership and take it public.

The move was aimed to placate activist investor Carl Icahn, but also embraces a trend in the energy sector as other companies move to unload pipelines, refineries and drilling rigs into such partnerships, which don't pay corporate income taxes and pay out most of their cash flow to investors in the form of distributions like a dividend.

In the latest quarter, Transocean reported a profit of $233 million, or 64 cents a share, down from $456 million, or $1.26 a share, a year earlier. Excluding impairments, tax benefits and other items, adjusted profit fell to 73 from 91 cents a share. Revenue inched up 0.3% to $2.33 billion.

Analysts surveyed by Thomson Reuters expected a profit of 72 cents a share on $2.36 billion in revenue.

Overall, costs and expenses climbed 5.7%.

Average daily revenue climbed 2.9% from a year earlier. The fleet-utilization rate was 75%, down from 79% last year.

Separately, Transocean announced that a subsidiary awarded contracts to a shipyard in Singapore to construct two ultra-deepwater drillships. The total capital cost is estimated to be about $1.2 billion. Transocean also entered an option to order up to three more of the ships of the same design and specifications.

Shares of Transocean dropped by a penny to $43 in after-hours trading.

Write to John Kell at [e-mail]

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