What's In The Cards For Transocean (RIG) In Q4 Earnings?
Zacks Investment Research | Feb 11, 2020 10:33PM ET
Transocean Ltd. (NYSE:RIG) is set to release fourth-quarter 2019 earnings results on Monday Feb 17, after the market closes.
The current Zacks Consensus Estimate for the to-be-reported quarter is pegged at a loss of 31 cents per share on expected revenues of $821.29 million. There has been no change in estimates for the bottom line over the past 30 days.
Let’s delve into the factors that might have impacted the company’s performance in the December quarter.
Factors at Play for Q4 Results
With the U.S. offshore industry witnessing early signs of revival, evidenced by the increasing project sanctions, Transocean is expected to have capitalized on this uptrend effectively, given its technologically advanced and versatile drilling fleet.
The company anticipates fourth-quarter adjusted contract drilling revenues to be roughly $825 million, indicating a 10.3% rise from the year-ago reported figure of $748 million. Strong revenues from Deepwater Corcovado and Deepwater Mykonos drill ships are likely to have contributed to this bullish view.
However, over the last few quarters, the company has been bogged down by operational inefficiencies, which might have hurt its margins in the quarter to be reported. Further, the company forecasts its operation and maintenance expenses to be $585 million in the fourth quarter, suggesting an increase of 18% from $497 million reported in the year-ago period. It also expects its capital outlay to escalate for the fourth quarter, which is likely to have limited its earnings growth.
What Does Our Model Say?
The proven Zacks model does not conclusively predict an earnings beat for Transocean this time around. The right combination of a positive Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.