Post Earnings Coverage as Transocean’s Q4 Results Beat Estimates

Upcoming AWS Coverage on Ensco Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 10, 2017 / Active Wall St. announces its post-earnings coverage on Transocean Ltd (NYSE: RIG). The Company released its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full year fiscal 2016 (FY16) on February 23, 2017. The Zug, Switzerland-based Company’s operating revenues and adjusted diluted EPS were down on a year-over-year basis; however, they outperformed market consensus estimates. Register with us now for your free membership at:

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One of Transocean’s competitors within the Oil & Gas Drilling & Exploration space, Ensco PLC (NYSE: ESV), reported Q4 and full year 2016 results on February 27, 2017. AWS will be initiating a research report on Ensco in the coming days.

Today, AWS is promoting its earnings coverage on RIG; touching on ESV. Get our free coverage by signing up to:

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Earnings Reviewed

In Q4 FY16, Transocean operating revenues declined to $974 million from $1.85 billion recorded at the end of Q4 FY15. However, operating revenue numbers for Q4 FY16 beat market consensus estimates of $785.5 million. Additionally, the Company spent $314 million on operating and maintenance in Q4 FY16 compared with $794 million in the prior year’s same quarter.

The offshore oil and gas drilling Company reported operating income of $316 million in Q4 FY16 compared to $742 million reported in the year ago comparable quarter. The Company’s net income attributable to controlling interest was $226 million, or $0.60 per diluted share, in Q4 FY16 compared $611 million, or $1.66 per diluted share, in Q4 FY15. The Company’s adjusted net income for the reported quarter was $239 million, or $0.63 per diluted share, compared to $615 million, or $1.68 per diluted share, in Q4 FY15. Wall Street had estimated the Company to report adjusted net income of $0.04 per diluted share.

In full year FY16, the Company reported total operating revenues of $4.16 billion compared to $7.39 billion in FY15. The Company’s net income attributable to controlling interest fell during FY16 to $782 million, or $2.10 per diluted share, from $865 million, or $2.36 per diluted common share, in FY15. Meanwhile, the Company’s adjusted net income for FY16 was $655 million, or $1.75 per diluted share, compared to $1.74 billion, or $4.74 per diluted share, in FY15.

Operating Metrics

During Q4 FY16, the Company’s total contract drilling revenues were $793 million compared to $1.46 billion in the prior year’s same quarter. In Q4 FY16, average daily total drilling fleet revenue stood at $329,400 compared to $422,800 in Q4 FY15. Additionally, the Company’s other total revenues during Q4 FY16 came in at $181 million versus $395 million in Q4 FY15.

Transocean’s total drilling fleet utilization fell to 46% in Q4 FY16 from 60% in Q4 FY15. However, total drilling fleet’s revenue efficiency improved to 100.3% in Q4 FY16 from 95.9% in previous year comparable quarter. Furthermore, the Company has a contract backlog of $11.3 billion as of February 2017.

Cash Flow and Balance Sheet

In the year ended on December 31, 2016, Transocean generated $1.91 billion of cash from its operating activities compared to $3.45 billion in the previous year comparable quarter. As on December 31, 2016, the Company had cash and cash equivalents balance of $3.05 billion compared to $2.34 billion as on December 31, 2015. Furthermore, the Company reported long-term debt amounting to $7.74 billion as on December 31, 2016, up from $7.40 billion recorded as on December 31, 2015.

Stock Performance

On Thursday, March 09, 2017, the stock closed the trading session at $11.99, declining 3.31% from its previous closing price of $12.40. A total volume of 19.26 million shares have exchanged hands, which was higher than the 3-month average volume of 12.62 million shares. Transocean’s stock price surged 20.75% in the past six months, and 7.34% in the previous twelve months. Shares of the company have a PE ratio of 5.63 and currently have a market capitalization of $4.50 billion.

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