Transocean Swings to a Quarterly Profit
May 04 2016 - 7:00PM
Dow Jones News
Oil driller Transocean Ltd. swung to a first-quarter profit as
it slashed spending to offset a 35% revenue drop brought on by an
oil rut amid a supply glut wreaking havoc through the sector.
Rig utilization fell to 51%, from 60% in the previous quarter
and 79% in the year-ago period. Contract backlog, meanwhile, fell
to $14.6 billion as of the company's most recent fleet status
report in April, continuing a downward trend.
As of Feb. 11, Transocean had said Shell and Chevron accounted
for about 51% and 21%, respectively, of the backlog. But both
companies are cutting spending as they contend with the slump in
oil prices.
Switzerland-based Transocean, which has the world's largest
fleet of offshore drilling rigs, has sharply cut its fleet, taking
some rigs out of service and scrapping others as it tries to
recover from an ill-timed expansion just before oil prices
collapsed.
Meanwhile, the oil-price slump has also affected the results of
the master limited partnership it formed to boost its financial
structure and mollify friction with billionaire investor Carl
Icahn. Shares of Transocean Partners LLC, closed at $11.98 on
Wednesday, down 21% over the past 12 months.
Over all, Transocean reported a profit of $249 million, or 68
cents a share, compared with a year-earlier loss of $483 million,
or $1.33 a share. Excluding restructuring charges and other items,
profit was 69 cents a share, down from $1.10 a share a year
earlier.
Revenue dropped to $1.34 billion from $2.04 billion a year
earlier.
Analysts surveyed by Thomson Reuters had projected adjusted
profit of 29 cents a share on $1.14 billion in revenue.
Transocean cut expenses to $925 million, compared with $1.42
billion a year earlier.
Shares, down 45% over the past 12 months, rose 1.2% to $10.26 in
after-hours trading Wednesday.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
May 04, 2016 18:45 ET (22:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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