RIG Transocean Ltd

Oil driller Transocean Ltd.'s second-quarter profit dropped sharply as revenue was nearly halved.

Still, results beat expectations, enabling its beaten-down stock to gain 2%, to $10.70, in after-hours trading.

On Monday, the Switzerland-based company said it intended to buy back the master limited partnership it had formed in 2014 to boost its financial structure, allowing it to shift some of its rigs and other assets to the partnership and lower taxes, and mollify friction with billionaire investor Carl Icahn.

Transocean Partners' shares, up 40% this year, edged up in after-hours trading to $12.35.

One of the world's largest offshore drillers, Transocean has been pummeled by an oil rut that has upended the sector, pressing results for most and crushing others.

Transocean, which boasts the world's largest fleet of offshore drilling rigs, spent billions of dollars to expand its fleet right before oil prices collapsed.

In the latest period, expenses were $767 million, down 17% from the previous quarter, while the rig utilization fell to 47%, from 51% in the previous quarter and 75% in the year-ago period.

Contract backlog, meanwhile, fell to $13.7 billion as of the July fleet status report, from $14.6 billion in April.

Over all, Transocean reported a profit of $77 million, or 21 cents a share, compared with $342 million, or 93 cents a share, a year earlier. Excluding impairment charges and other items, profit was 17 cents a share, down from $1.11 a share a year earlier.

Revenue dropped to $943 million from $1.88 billion a year earlier.

Analysts surveyed by Thomson Reuters had projected Transocean would break even on an adjusted basis, with revenue falling to $919.8 million.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

August 03, 2016 18:15 ET (22:15 GMT)

Transocean (NYSE:RIG)
Historical Stock Chart
From Mar 2024 to Apr 2024

Transocean (NYSE:RIG)
Historical Stock Chart
From Apr 2023 to Apr 2024