Transocean Ltd. Poised for Earnings Report: Insights Ahead of Q4 Announcement
Transocean Ltd. RIG is scheduled to release its fourth-quarter earnings on Feb. 17, after the market closes. The Zacks Consensus Estimate for the upcoming quarter stands at 2 cents per share, while revenues are projected to be around $958.06 million.
Explore the latest EPS estimates and surprises on Zacks Earnings Calendar.
Before exploring the factors that may impact RIG’s upcoming results, let’s review the company’s performance from the last quarter.
Q3 Earnings Overview and Surprise Record
In the previous quarter, the Swiss oil and gas drilling company reported adjusted earnings that exceeded expectations. RIG announced breakeven adjusted earnings per share, outperforming the Zacks Consensus Estimate of a 4-cent loss. This success was largely due to solid performance across RIG’s business segments. Additionally, adjusted revenues of $948 million surpassed the Zacks Consensus Estimate by 1.3%.
RIG has achieved earnings beats against the Zacks Consensus Estimate in three out of the last four quarters, with an average surprise of 37.13%. This trend can be visualized in the chart below:
Transocean Ltd. Price and EPS Surprise
Transocean Ltd. price-eps-surprise | Transocean Ltd. Quote
Earnings Estimates for RIG Stock
The Zacks Consensus Estimate for RIG’s fourth-quarter 2024 earnings has remained steady over the past week. The current estimate indicates a year-over-year increase of 28.08%. Furthermore, the revenue estimate suggests a remarkable surge of 122.22% compared to the same period last year.
Key Factors Impacting RIG’s Q4 Results
Transocean generates revenue by providing drilling services to oil and gas companies. The company rents out advanced offshore drilling rigs and equipment, along with skilled workers, enabling these companies to drill undersea wells. RIG’s earnings are derived from fees charged to major energy producers and government entities for the use of its services and equipment.
The company’s revenues are expected to show improvement in the forthcoming quarter. Projections indicate fourth-quarter revenues may increase to $960 million, up from $748 million a year ago, driven by strong performance in RIG’s business segments.
The Ultra-Deepwater Floaters segment is projected to grow by 26.8% year-over-year to approximately $679.8 million. Similarly, the Harsh Environment Floaters segment is anticipated to rise by 36.7% year-over-year, reaching around $280.2 million.
On a cautionary note, rising costs could impact RIG’s profitability during the quarter. Estimates indicate that total costs and expenses may grow by 2.2% year-over-year to $820.6 million. Operating and maintenance costs are expected to see a 2.8% increase, totaling approximately $584.9 million; General and Administrative expenses are predicted to rise by 2.3% to $51.2 million. This cost inflation is largely a result of current market conditions.
What Our Model Predicts for RIG
According to our model, an earnings beat is unlikely for Transocean this quarter. A combination of a favorable Earnings ESP and a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold) typically increases the chances of beating earnings expectations. However, this is not the case for RIG.
RIG’s Earnings ESP: The Earnings ESP, which reflects the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, stands at -136.36%. More insights on potential investment opportunities can be uncovered with our Earnings ESP Filter.
RIG’s Zacks Rank: RIG currently holds a Zacks Rank of #3.
Additional Stock Recommendations
Investors might want to consider some alternatives within the energy sector, as these companies are better positioned for potential earnings beats this reporting season.
CNX Resources CNX boasts an Earnings ESP of +3.60% and a Zacks Rank of 2. Notably, CNX has a market capitalization of approximately $4.57 billion and its stocks have seen a 49.3% increase over the past year. The Zacks Consensus Estimate for CNX’s earnings per share in 2025 suggests a modest increase of 4.18% compared to last year.
Calumet, Inc. CLMT has an Earnings ESP of +7.11% and is rated at Zacks Rank 2. With a market value of around $1.39 billion, CLMT’s shares have risen by 1% in the same timeframe. The Zacks Consensus Estimate for CLMT’s 2025 earnings per share is impressively projected to surge by 104.46% year-over-year.
California Resources CRC carries an Earnings ESP of +2.59% and holds a Zacks Rank of 3. Scheduled to report earnings on March 3, CRC has outperformed the consensus estimate in each of the last four quarters, achieving an average surprise of 13.11%. Valued at about $4.44 billion, CRC’s shares have declined by 9.9% over the past year.
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Transocean Ltd. (RIG) : Free Stock Analysis Report
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
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