Offshore drilling giant,
), reported strong first-quarter 2014 results on significant higher
dayrates. The favorable result led to more than 2.0% share price
rise on the NYSE, in after-market trade hours.
Earnings per share (excluding special items) came in at $1.43,
surpassing the Zacks Consensus Estimate of $1.00. The bottom line
also improved from the year-ago adjusted profit of 94 cents per
Quarterly total revenue of $2,339.0 million beat the Zacks
Consensus Estimate of $2,254.0 million and improved from the
year-ago figure of $2,184.0 million.
Transocean's high-spec floaters contributed approximately 74.5% to
the total revenue, while mid-water floaters and high-spec jackup
rigs accounted for 17.6% and 5.8%, respectively. The remaining
revenues came from rig activities, integrated services and others.
Transocean posted operating income of $672.0 million during the
quarter, up 40.3% from $479.0 million in first-quarter 2013.
Total operating and maintenance expenses decreased 6.4% year over
year to $1,269.0 million.
Dayrates & Utilization
Total average dayrates increased to $413,100 in the reported
quarter from $361,200 in the first quarter of 2013. The improvement
can be attributed to higher dayrates from High-Specification
Floaters as well as Midwater Floaters.
Overall fleet utilization was 78%, down from the year-ago
utilization rate of 80%.
Capital Expenditure & Balance Sheet
Capital expenditures during the quarter totaled $1.1 billion.
As of Mar 31, 2014, Transocean had cash and cash equivalents of
$1,987.0 million and long-term debt of $10,308.0 million
(representing a debt-to-capitalization ratio of approximately
On May 5, 2014, Transocean declared its plan to create a new entity
named Caledonia Offshore Drilling Company. The new firm will likely
get eight midwater drilling rigs based in the U.K. North Sea.
Transocean added that Caledonia Offshore Drilling Company will
likely be formed by the second half of 2014.
Transocean currently carries a Zacks Rank #3 (Hold), implying that
it is expected to perform in line with the broader U.S. equity
market over the next one to three months.
Meanwhile, one can look at better-ranked players in the same
Pioneer Energy Services Corp.
Helmerich & Payne Inc.
New Source Energy Partners LP
). Pioneer Energy Services sports a Zacks Rank #1 (Strong Buy),
while Helmerich & Payne and New Source Energy Partners hold a
Zacks Rank #2 (Buy).
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