Yahoo Finance Transocean (RIG) Q1 Loss Narrower Than Expected, Revenues Miss
Transocean, Inc. RIG reported an adjusted net loss of 3 cents per share in the first quarter of 2024. The figure was narrower than the Zacks Consensus Estimate of a loss of 13 cents per share. RIG’s bottom line also improved from the year-ago period’s reported loss of 38 cents per share. This improvement can be attributed to strong first-quarter performance of RIG's Ultra-deepwater floaters segment.
The offshore drilling powerhouse’s total adjusted revenues of $767 million missed the Zacks Consensus Estimate of $779 million. However, the top line improved 18.2% from the prior-year reported figure of $649 million. This outperformance was primarily due to increased activity for rigs, higher day rates and increased reimbursable revenues.
Transocean Ltd. Price, Consensus and EPS Surprise
Transocean Ltd. price-consensus-eps-surprise-chart | Transocean Ltd. Quote
Segmental Revenue Breakup
Transocean’s Ultra-deepwater floaters contributed 74.6% to net contract drilling revenues, while Harsh Environment floaters accounted for the remaining 25.4%.
Revenues from the Ultra-deepwater and Harsh Environment floaters totaled $569 million and $194 million, respectively, compared with the year-ago quarter’s reported figures of $484 million and $165 million.
Ultra-deepwater and Harsh Environment revenues fell short of our projection of $571.5 million and $208.1 million, respectively.
Revenue efficiency dropped to 92.9% from 97% in the year-ago quarter.
Day rates, Utilization & Backlog
Average day rates in the reported quarter increased to $408,200 from $364,100 in the year-ago period. The figure missed our estimate of $431,300.
Average revenues per day from Ultra-deepwater floaters increased to $422,900 from $360,000 in the year-ago quarter. The same from Harsh Environment floaters, however, decreased to $367,900 from $376,000 in the comparable period of 2023.
The fleet utilization rate was 53.7%, up from the prior-year period’s figure of 51.9%.
Transocean’s backlog of $8.9 billion decreased sequentially from $9.01 billion.
Costs, Capex & Balance Sheet
Operations and maintenance (O&M) costs increased to $523 million from $409 million reported a year ago. The company spent $83 million on capital investments in the first quarter. Cash used in operating activities totaled $86 million.
Cash and cash equivalents amounted to $446 million as of Mar 31, 2024. Long-term debt totaled $6.8 billion, with a debt-to-capitalization of 39.3% as of the same date.
Guidance
RIG projects O&M expenses of approximately $570 million for the second quarter. This quarter-over-quarter increase is primarily driven by increased activities associated with the four rigs, as well as an increase in in-source maintenance costs.
General and administrative costs are estimated to be $60 million. This sequential increase is primarily due to transaction fees or debt financing, debt refinancing, and an earlier retirement program offered to long-term employees.
The company expects a net interest expense of $138 million for the second quarter. This includes an estimated $8 million in capitalized interest.
Projected capital expenditures for the second quarter are $92 million, with about $55 million allocated for the preparation of Deepwater Aquila for its 3-year contract with Petrobras PBR in Brazil. Cash taxes are expected to total $17 million.
The company expects adjusted revenues to be at the lower end of the range, around $3.6 billion. This includes approximately $215 million in additional services and reimbursement expenses.
The company anticipates annual O&M expenses of $2.2-$2.3 billion. The company anticipates G&A costs of $210 million.
Transocean's projected year-end 2024 liquidity is $1.4 billion. This includes the $575 million capacity of its newly amended, extended and undrawn revolving facility. It also includes approximately $395 million of restricted cash, most of which is reserved for specific services.
For 2024, Transocean anticipates capital expenditures (CapEx) of $231 million. This breakdown includes $134 million specifically allocated to the Deepwater Aquila and $97 million for ongoing maintenance and contract preparation.
Important Energy Earnings so far
While it's still early in the earnings season, there have been a few key energy releases so far. Let’s take a look at these stocks.
SLB SLB, the largest oilfield contractor, announced first-quarter 2024 earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. The bottom line also increased from the year-ago quarter’s level of 63 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activities in the international market. As of Mar 31, 2024, the company had approximately $3.5 billion in cash and short-term investments. It had a long-term debt of $10.7 billion at the end of the quarter.
Energy infrastructure provider Kinder Morgan KMI reported first-quarter adjusted earnings per share of 33 cents, a penny above the Zacks Consensus Estimate. The bottom line was favorably affected by increased financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s first-quarter discounted cash flow (DCF) totaled $1.42 billion, up from $1.40 billion reported a year ago.
As of Mar 31, 2024, Kinder Morgan reported $119 million in cash and cash equivalents. Its long-term debt amounted to $30.1 billion as of the same date. For full-year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.
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